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Ferrari, not Tesla, might be the stock to buy

Last week Tesla's earnings – or lack thereof – were one of the big stories in the auto industry. As usual, the electric carmaker didn't make money, but the news sent the market, analysts, and Tesla's devoted fans into a lather. But another company, this plucky upstart called Ferrari, also attracted a positive reaction from the market and actually had the financials to back it up. Ferrari posted net revenues of $898 million (at today's exchange rates) EBITDA of $265 million (a slightly complicated way to snapshot financial performance) and an adjusted net profit of $136 million in the first quarter. The company delivered 2,003 cars, and sales of its V12 models increased 50 percent. It quietly made progress nearly a year and a half into its life as an independent automaker. For 2017, Ferrari expects to deliver 8,400 cars and rake in net revenue of $3.6 billion. No one thought Ferrari would flounder when Fiat Chrysler Automobiles spun it off in fall 2015. With a rich history, expensive products, and its own loyal fan base that's arguably even larger than Tesla's, the company seemed poised for success, though skeptics wondered how it might fare after longtime chief Luca di Montezemolo stepped down before the spinoff. Plus, the company remains within the FCA sphere, as its key stakeholders are largely connected to its former parent in some way, and Chairman Sergio Marchionne also steers FCA. Last week's results showed Ferrari is gaining footing in the evolving automotive world, and analysts responded. UBS analyst Michael Binetti reiterated Ferrari stock (RACE on the NYSE) as buy status and raised his target price from $85 to $92. Morgan Stanley's Adam Jonas was even more bullish, raising projections to $100 in the next 12 months. Shares were trading around $82 Monday morning. Both analysts viewed Ferrari as something different than a conventional automaker stock, with Binetti comparing it to luxury house Hermes, which produces high margins even for a specialty goods maker. Jonas suggested Ferrari's singular reputation and history (16 Formula One Constructors titles, the most ever) could insulate its products when autonomous and electric cars become even more commonplace. "In our view, a Ferrari is not transportation," he wrote in a note to clients. "Ownership is viewed as an exclusive club, and membership requires more than just money.

Tesla's new $408 per month business lease deal for Model S reminds us of last 'revolutionay' deal

Almost exactly a year ago, Tesla Motors announced what it called a "revolutionary" lease deal for the Model S. Since the electric automaker used some unusual assumptions in its calculations to get to a headline-worthy $500-a-month "true cost of ownership," the company had to quickly change its tune. Some of the same assumptions are back in a business lease deal from new subsidiary, Tesla Finance, for $408 a month (sort of) that was announced today. Tesla is touting the easy-to-understand lease agreement, which takes all of three pages and is "written in plain language." The agreement can also be signed digitally on the car's touchscreen when the car arrives. That, plus the low cost, is the good news. The business lease program is currently only available in ten states. The estimated effective cost of $408 a month sure sounds great but, just as with the first consumer lease plan for the Model S, there are a lot of caveats to be aware of. For one thing, the actual monthly payment is $1,012, well over twice the $408 number. Tesla estimates that you'll save $261 a month in gasoline costs and $343 a month in business tax benefits (with Tesla calculating a 40 percent effective tax rate and 70 percent business use). Those gas savings, "are calculated assuming $0.11 per kilowatt hour compared to paying $4.90 per gallon for premium gasoline with a fuel efficiency of 20 miles per gallon," so if your business already runs a fleet of Toyota Priuses, you can forget the $408 number. Oh, and the business lease program is currently only available in ten states - CA, CO, CT, FL, IL, MA, MD, NY, TX, and WA. Yes, that list includes Texas, where you can't officially buy a Model S. Tesla spokeswoman Shanna Hendriks told AutoblogGreen that the company has a lessor's license in the state of Texas, which allows it to offer the business leasing deal there. The dealership license, which the company can't get in Texas, is the thing that is preventing sales. No matter which of the ten business lease states you're in, the first vehicles under this program have an estimated delivery date of June 2014. Read more below. Tesla Business Leasing By The Tesla Motors Team April 8, 2014 A year ago, Tesla introduced a Resale Value Guarantee that gives customers the option to return their Model S after three years for a known value.

Tesla talking about first European factory, but it won't happen soon

Tesla Motors is, as always, thinking big. The company already has a factory in California with a lot of empty space. But with Model S deliveries happening in Europe and a right-hand drive version just launched in the UK, CEO Elon Musk is already talking about building EVs in Europe. We did some math and let's just say we think any such facility is likely a long way off. The California-based company plans on eventually building a factory in Europe, Automotive News Europe says, citing an interview with Musk. But Musk says Tesla would have to sell 160,000 vehicles a year in Europe to justify such a factory. Musk sees that many sales as a given, eventually, and is planning on building an R&D center in the UK within the next two years while expanding its assembly factory in the Netherlands. "It will take Tesla a bit longer to ramp up in Western Europe than in the US" – Ed Kim But just how long might it take to get to that 160,000 figure across the Pond? Well, through the first four months of the year, Tesla sold 3,467 units of its Model S electric sedans in Europe, Automotive News says, citing research firm JATO Dynamics. Extrapolating from Tesla's first-quarter 2014 delivery numbers (the company doesn't publish monthly sales totals), Tesla sold about 8,600 Model S sedans worldwide through April. Even if Tesla speeds things up in Europe this year and approaches, say, 15,000 units, that's still less than 10 percent of Musk's goal. Even with new models, 15,000 is a long way from 160,000, and it appears that Tesla will grow slower in Europe than it has in the US. "It will take Tesla a bit longer to ramp up in Western Europe than in the US," Ed Kim, vice president of industry analysis at AutoPacific, told AutoblogGreen. "This is partially due to infrastructure issues. In the US, most potential Tesla customers live in detached single family homes, making installation of a personal charging infrastructure at home a snap. In Western Europe, many potential customers – even affluent ones – live in communal living situations like condos and apartments. And even having assigned parking does not guarantee that they would be able to install chargers there." Earlier this year, Tesla dropped the prices of its Model S in Europe because of the strengthening of the Euro. The company initially priced the Model S in the UK at almost $20,000 above the US base price.