Model S boosts Tesla, but mass market electric cars still elusive
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Kevin Baillie, co-founder of a visual effects company that works on major motion pictures, had never been in a car like his new Tesla Model S electric sedan, but somehow it looked familiar.
"When I got into my car, I thought, 'Wait a minute, this looks like something from the movie I just worked on,'" said Baillie. "It's like Star Trek."
The ringing endorsement of car enthusiasts like Baillie has given Tesla Motors Inc a much needed stamp of approval in a "green" car industry that has seen high-profile failures and struggles over the last year.
The Model S is ten-year-old Tesla's first attempt to reach a mainstream audience for electric cars. Sales of the five-passenger sedan have outpaced expectations since its launch last year, and on Thursday, Consumer Reports magazine awarded it with a near-perfect rating.
The review coupled with Tesla's first-ever quarterly profit boosted the company's shares 36 percent to an all-time high of $75.77 - more than quadruple its 2010 initial public offering price of $17.
The stock's surge came as a surprise to a number of investors betting on Tesla's decline. Tesla is more heavily shorted than 98 percent of the roughly 4,200 companies tracked.
Many industry experts and analysts celebrated Tesla's fortunes, but warned that the Model S - which starts at around $70,000, before a federal tax credit - remains a niche offering available to only the wealthiest 10 million U.S. households, at best, even with the help of Tesla's new financing deal.
"Have we read the final chapter on Tesla? No. But at this point, you get measured on what you've accomplished to date, and they've done a damn good job," said Tim Leuliette, president and CEO of auto parts supplier Visteon Corp, in an interview.
For Tesla to reach a broader market and silence electric car naysayers, the company must successfully deliver its Model X crossover next year as well as a third-generation car by 2017 that will cost between $30,000 and $35,000.