Could 'Range Anxiety' Actually Be Holding Back Some Tesla Investors?

If you follow electric cars, you know that they have one major disadvantage, relative to gas-powered autos.

The don't go as far.

For the major automakers who are also building all-electric cars, this isn't a big deal. Nissan, for example, doesn't pitch its Leaf electric vehicle (EV) as a long-range hauler. It only get about 100 miles per charge.

For Tesla, however, range is a selling point. The company's main EV, the Model S sedan, can get about 300 miles to a charge, depending on driving style and battery choice.

That's comparable with a gas-powered luxury car.

But it all depends on conditions and how you drive.

The Model S has been a pretty big hit, winning Motor Trend's "Car of the Year" award as well as accolades from the automotive media (for the most part - some long-term tests have turned up problems). It's not selling in massive volumes, but it has established Tesla and CEO Elon Musk as forces to be reckoned with. And it's set the stage for the company's future.

But that doesn't mean there isn't some skepticism taking shape. Over the past two weeks, both Morgan Stanley and Goldman Sachs have sounded cautionary notes about Tesla's stock, which has been on a tear - up 65% year-to-date (although down almost 5% in trading on Monday).

On CNBC last week, Charles Sizemore of Sizemore Capital Management joined the cautionary chorus. He followed up his appearance with some published analysis in which he reiterated his concerns but also expressed his own point of view on whether Tesla ownership makes sense for him:

As an example, I regularly drive from Dallas to Houston on business, a trip of about 250 miles door-to-door. A Tesla Model S couldn't get me there on one charge. Assuming a driving speed of 70 miles per hour and an outside temperature of 90 degrees, Tesla estimates that I would get 180-229 miles on a single charge. I tend to drive fairly aggressively - this is Texas, after all - so the figures are probably lower.

It takes an hour and 12 minutes to charge a Tesla battery. That means my three-and-a-half-hour business trip gets lengthened to nearly five hours each way.

Again, I'm not bashing Tesla's technology. Personally, I think it's incredible. But I'm also realistic enough to know that it's impractical for most drivers at this time, irrespective of cost.

This is something of a practical encapsulation of what I'll call the rational bear case for Tesla: The company is impressive as hell, but is it really going to convince luxury buyers to turn in the keys to their Mercedes, BMWs, and Audis? And even if it can, will it be able to manage the same trick with the mass-market buyers it wants to choose its forthcoming Model X SUV and Model 3 EV?

If it doesn't, then all that future growth that's supporting today's elevated stock price could vanish.

But then there's the bull case, which boils down to something like this: Tesla is transforming the auto industry and others will follow its lead. It's like personal computers were in the 1980s. You'd be nuts to not invest.

And then there's the burned bear case: Tesla's demise has often been predicted, and yet...the company is still around, bigger and better than ever.

Something interesting is going on right now with these various predictions about where Tesla is headed. For a while, the discussion was all about the stock and whether the run-up was justified.

It was a largely financial debate.

Questions are now being asked about two other issues. First, are EVs - an especially Tesla EVs - truly ready to capture significant amounts of market share from conventional cars? Second, does Tesla's Model S really match or improve on the current luxury driving experience?

This debate is about the product.

So we end up with two types of "range anxiety": a concern that Tesla's stock can't go the distance at its current valuation; and the more practical matter of whether the cars themselves can go far enough.