Profitability of Tesla Motors (NASDAQ:TSLA) Is Not Up To the Mark – Investors Need To Be Careful Before They Decide To Buy the Stocks

Tesla Motors (NASDAQ: TSLA) are similar to that of Apple Inc. (NASDAQ:AAPL). The company is not perceived as a car maker, but a company that carefully designs electronic products for transportation purposes. What the Model S of Tesla is to the automobile industry is exactly what the first Mac was to the PC industry. That said, Tesla Motors (NASDAQ:TSLA) has failed to follow Apple when it comes to profitability.

According to some of the market analysts, Tesla is a great company when it comes to technology but that does not mean that it will be a great investment. The company has invested a lot of money in its Research and Development sector. And in order to see growth in the long term, the company needs to see huge margins in that particular category. During the third fiscal quarter of the year 2014, Tesla Motors (NASDAQ:TSLA) was able to deliver around 7,785 vehicles at an average selling price of $97,000. The net loss that the company suffered for each vehicle came to a total of $9,500, and that too excluding the ZEV income. If we include the ZEV income, the net loss comes to a total of $20,000 per vehicle.

What is interesting to note here is the fact that no one ever questions as to whether the loss that Tesla is reporting is justified or not. The company has chosen to report a loss for each of its Model S vehicle, when it could very easily raise the price of its vehicles. The demand for Tesla Motors (NASDAQ:TSLA) will not go down even if the company raises the price by another $10,000 or $15,000. The company can improve its profitability significantly if it somehow strikes a balance between its production and average selling price.

Coming to the stocks of the company, Tesla Motors (NASDAQ:TSLA), during the last trading day of December 31, 2014, started its stocks at a price of $223.09 and closed at a price of $222.41, after hitting the highest price of $225.68. The intraday range for the company’s stocks was recorded to be from $222.25 to $225.68. As far as the market capitalization of the company is concerned, the figures currently stand at $27.89 billion.

The company is determined to correct its mistake. Perhaps this is the reason why the latest version of Model S that has a dual motor is valued at $24,000 higher price. It looks strange to raise the price by this much for an additional piece of equipment. It seems like Tesla is worried too about its profitability.

Since the vehicles of Tesla Motors (NASDAQ:TSLA) do not run on gas, the fluctuations in oil prices will not affect the company. Tesla has developed a brand name for its products, and now it just needs to tap into that in order to gather more and more money, and make the deal appealing for the investors.