Tesla Stock Can Overcome This Challenger
Tesla Motors Inc (NASDAQ:TSLA) stock is back to $230.0 levels and the company came very close to delivering 80,000 cars in 2016, but could not touch the magic number due to production problems. Tesla may solve these issues soon, but a new challenger in the electric vehicle space looks ready to bring about a new set of problems for Tesla. TSLA stock had reached this level in August last year.
Faraday Future revealed its all electric SUV, “FF91,” at the just-concluded Consumer Electronics Show (CES) 2017 at Las Vegas. It has impressive specifications and Faraday Future says that the company has received more than 64,000 reservations for its FF91, which can accelerate from 0 to 60 miles per hour in a mere 2.39 seconds, as claimed by the company.
Faraday Future revealed the FF91 crossover-style car at CES and said that it combines the performance of a powerful car with a high level of comfort. Other features include advanced online entertainment features for passengers and the ability to park itself using autonomous driving tech. Its autonomous features and acceleration capabilities were tested against similar luxury vehicles from Tesla, Bentley, and Ferrari. (Source: Faraday’s Future On The Line As It Debuts High-Powered FF91 Electric Crossover, Forbes, January 4, 2017).
Faraday Future is one of the many new breed of automakers who are focused on selling high-performance, self-driving electric cars. However, it will take some time before they can pose a serious threat to Tesla Motors or Tesla stock. TSLA stock has been through many ups and downs, but the infrastructure that the company has built today is difficult for any new entrant to beat.
Faraday Future has not provided the pricing for the FF91, but buyers can expect to pay a minimum of $180,000, which is about two times as much as a “Tesla Model S” costs; and will be set to compete with other high-end luxury cars.
With the acquisition of SolarCity, Tesla has begun the transition to being an energy company with focus on clean transportation, clean energy generation, and clean energy storage. The company has been through many financial problems and seems to have settled in a stronger position now, with its mass market “Model 3” set to arrive in the second half of 2017.
Faraday Future, on the other hand, has a long way to go and has a number of problems, besides financial, to make its cars available to its high-end market. Its high-priced, low-volume cars are likely to take a long time before they can pose any challenge to Tesla Motors or Tesla stock. However, competitors like General Motors Company (NYSE:GM), which is planning to bring its mass market electric vehicles soon, are likely to cause some setbacks. TSLA stock may take a beating on that front if Tesla Motors Inc does not bring out its Model 3 on time.