Tesla Motors Inc (TSLA) Shrugs Off Slump After BMW Statements

tesla motorsIt’s been a rough week for Tesla Motors Inc (NASDAQ:TSLA). For the five trading days from Monday, Nov. 24, 2014, through Monday, Dec. 1, Tesla fell 4.59 percent, with most of the drop occurring yesterday (Dec. 1) after BMW (OTC: BAMXY) said it did not want to take a stake in TSLA. The Dow was only down 0.17 percent for the five days, and NASDAQ was actually up by 0.32 percent, so TSLA was trailing far behind.

BMW Dashes Hopes

Recently, Tesla CEO Elon Musk has been raising investor hopes when he said that Tesla and BMW were having informal talks that might lead to their sharing battery technology and charging stations. Those hopes appeared to have been dashed over the weekend, when BMW told the German magazine Wirtschafts Woche that there have been no concrete negotiations about cooperation. Further, BMW said, it was not interested in buying TSLA shares.

Reaction to BMW Article

On Monday, TSLA fell 5.3 percent and fell below both its 50-day and 200-day averages.

The negative reaction appears to have been short-lived. As of mid-afternoon today (Tuesday), TSLA is up slightly, in line with the rest of the market.

Fuel Cell Cars Could Be Competitive Threats

Toyota is planning to introduce an all-hydrogen car in the U.S. some time in 2015, which will use fuel cells that extract energy from hydrogen gas.

Toyota’s car could be a significant competitor to Tesla’s vehicles. According to Forbes, Toyota’s fuel cells should take the cars at least as far between refuelings as Tesla’s cars can go between battery charges. And Toyota has an advantage in its refueling time, which company officials said will take five minutes, which compares favorably to Tesla’s 20-minute recharging time at Superstations.

However, Tesla already has a network of charging stations in place. If Toyota is to compete, it needs to get a refueling infrastructure in place. Also, concerns about the hydrogen fuel-cell technology remain, because the manufacturing process produces pollution and because hydrogen is highly flammable.

Toyota said it will price the car at $57,500, which is lower than Tesla’s Model S price of $70,000, but still almost twice as much as the average price for a car in the U.S.

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