Miles Electric Vehicles, a U.S. manufacturer of low-speed, all-electric cars that were used by the U.S. Navy, the National Park Service and various universities including Yale, Stanford and UCLA, filed for Chapter 11 bankruptcy protection on Tuesday. Entrepreneur and philanthropist Miles Rubin founded the company in 2004 with the mission to “rapidly develop advanced all-electric vehicles to meet the needs of organizations and everyday drivers, while using no gas and producing zero tailpipe emissions.” According to Reuters, Miles Electric has “estimated assets in the range of $10 million to $50 million, and estimated liabilities of between $50 million and $100 million.”
Tesla (TSLA) has become the household name in the electric car market but industry stalwarts like General Motors (GM), Nissan (NSANY) and Ford (F) have poured millions of dollars into developing an all-electric vehicle that has broad appeal. Tesla has succeeded where others have not because of one “brilliant” move, says The Daily Ticker’s Henry Blodget.
Tesla “aimed at markets in which rich people can afford to buy a Tesla as a status symbol and as a third or fourth car,” he says in the attached video.
That may be true but “car enthusiasts love this car,” argues The Daily Ticker’s Aaron Task. “It’s not just environmentally sound or an expensive toy. It’s a car people love to drive.”
Investors love Tesla too; the stock has climbed more than 180% in six months.
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Tesla co-founder and CEO Elon Musk says the company is on track to sell 21,000 vehicles worldwide by year-end. The Tesla Model S has received rave reviews from Consumer Reports and Motor Trend declared the Model S as its 2013 Car of the Year. But there are non-believers who have started to ring the alarm bells on the company’s viability. On Sunday Barron’s reporter Bill Alpert challenged Tesla’s fundamentals, claiming that the stock could be a “lemon” and asserting that “Tesla's stock market fans are viewing its prospects through 3D glasses.” Tesla’s batteries cost “tens of thousands of dollars” Alpert writes, and the electric car company has to trim more than 20%-30% of its battery costs if it hopes to launch an affordable (about $45,000) car for the masses by 2016 as planned.
Both Blodget and Task agree that Tesla has the best chance of surviving the nascent electric car market.
“It’s really hard to build an electric car,” Task says. ‘The fact that these companies are going bankrupt or are on the verge of bankruptcy is not shocking. It looks like Tesla may actually make it.”