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Tesla Roadster

Tesla Roadster Sport

Tesla Model S
Electric car maker's initial public offering will be first U.S. automaker IPO since Ford Motor Co. (1956)

Tesla Motors weathered the rocky road of being a pioneer in the electric vehicle industry.  Faced with financial ruin at every turn, the company instead beat the odds and found the narrow road to success.  After a couple of limited edition 100-car series (beginning in 2006), full-scale production began March 2008.  And last July, fueled by the popularity of its 2010 Tesla Roadster, the company achieved profitability for the first time.

"Profitable electric automaker" sounds like a loaded oxymoron if there ever was one, but Tesla Motors has shown that electric vehicles can be not only good looking, but good business as well.  Its Roadsters have strong appeal among luxury buyers -- from the "green" factor, to the convenience of never getting gas, to the responsive performance of a powerful electric motor.

Thus when Tesla filed on Friday to make a $100 million USD public stock offering, it has turned many heads.  The IPO from the six-year-old company could be the hottest of 2010 -- after all, there hasn't been an IPO from a U.S. automaker since Ford Motor Co. first issued public stock in 1956.

Tesla has not announced a date for the IPO, but it is expected to land before the end of 2010.

The IPO has strong financial backing – Goldman Sachs, Morgan Stanley, JP Morgan, and Deutsche Bank Securities are underwriting the IPO.  Google founders Sergey Brin and Larry Page are among the venture capitalists that have already jumped at the chance to invest in the promising new star of the green auto world (Daimler also holds a stake).

The company also has a new vehicle on the horizon -- the Tesla Model S.  The Model S sedan is expected to get 160 to 300 miles on a charge and retail for approximately $49,900 after a $7,500 federal tax credit.  While still rather expensive, that price makes it somewhat competitive with the 2011 Chevy Volt (expected to retail in the low 30s after tax credit) and much more approachable for entry-level luxury buyers.

In other recent Tesla news -- also found within the SEC filing -- is an interesting nugget of information regarding the Roadster which is the only vehicle that Tesla currently sells. Unfortunately for Tesla, the company won't be able to sell the current Roadster after 2011 "due to planned tooling changes at a supplier for the Tesla Roadster."

It's more than likely that Tesla is talking about a "tooling change" happening at Lotus' Hethel, UK facility where the Roadster's chassis is assembled. The Roadster shares a number of components with the Lotus Elise -- including the dashboard, windshield, and suspension pieces -- so any change that affects the Lotus Elise is bound to affect the Roadster as well.

Previous reports have noted that the next generation Elise could be in production by 2011 at the earliest, but most likely in 2012. This would coincide with the timeframe that Tesla notes with regards to the end of first generation Roadster production. Tesla explains, "we do not currently plan to begin selling our next generation Tesla Roadster until at least one year after the launch of the Model S, which is not expected to be in production until 2012."

2012 will be a pivotal year for the company with no sales of the Roadster to bank on and a financially burdensome launch of a brand new vehicle (Model S). "We are almost entirely dependent upon revenue generated from the sale of our electric vehicles, specifically the Tesla Roadster, in the near term," adds Tesla Motors "Our future success will be dependent upon our ability to design and achieve market acceptance of new vehicle models, and specifically the Model S."

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Made in the USA ?
By hellokeith on 1/31/2010 7:03:41 PM , Rating: 1
Tesla is an interesting study on "manufacturing" in the US. Are we simply incapable of wholy domestic automobile manufacturing in the US without needing hundreds of millions of dollars in loans and handouts from the US govt?

I'm not criticizing Tesla for its success (or put another way, survival), but I am wondering why they depend on foriegn manufacturers for key pieces of their current roadster. Could they not partner with Ford or perhaps a domestic Honda / Toyota plant, and keep those manufactured items "in house" (i.e. US 48).

If the free market in the US wants to survive long term, it needs to start talking responsibility (and not forced by the government) for keeping jobs in the US.

On a more positive note, what is the best/easiest way for an individual to buy stock when Tesla IPO's ?

RE: Made in the USA ?
By Brandon Hill (blog) on 1/31/2010 7:32:09 PM , Rating: 3
In Tesla's case, they really had no choice but to go with someone like Lotus to help develop a lightweight chassis for the Roadster. Lotus already had the expertise in producing lightweight, aluminum chassis vehicles.

There are no current American-made roadster platforms that were light enough to meet Tesla's performance targets (and producing one from scratch on their own without assistance would have been $$$). The closest modern domestic RWD platform that I can think of that could have even possibly worked would have been the Pontiac Solstice/Saturn Sky which use the now dead Kappa platform.

Even then, the Kappa roadsters weigh around 2800 lbs in production trim. A U.S.-spec Lotus Elise, however, weighs about 2000 lbs in production trim. That's quite a difference -- once you take out the conventional drivetrain and add back the battery, control system, and electric motor, the Roadster weighs in at 2700 lbs which still undercuts a Kappa roadster while offering superior performance.

RE: Made in the USA ?
By therealnickdanger on 2/1/2010 8:37:41 AM , Rating: 3
If it makes y'all feel better, the Dodge Magnum served as a test mule for the Tesla Model S. I plan on jumping all over TSLA when it's made available!

RE: Made in the USA ?
By Lord 666 on 2/1/2010 11:01:03 AM , Rating: 1
Just read the fine print within the SEC filings about a rich Uncle Sam that can change contracts at will and make investors to agree on settling for pennies on the dollar.

RE: Made in the USA ?
By Cypherdude1 on 2/1/2010 3:19:44 PM , Rating: 2
The Model S sedan is expected to get 160 to 300 miles on a charge and retail for approximately $49,900 after a $7,500 federal tax credit
I don't know what the big deal is about Tesla. All their products are so overpriced, most people can't even afford them. Only the upper classes can afford Tesla products. If Tesla can sell $100,000 and $50,000 cars, then GM should do pretty well selling their Volt at $35,000.

RE: Made in the USA ?
By jimbojimbo on 2/1/2010 4:29:53 PM , Rating: 1
You forget one thing. The Volt looks stupid and the Tesla Roadster looks kick ass. Now if they were selling the Volt they first displayed it'd be a different story.

RE: Made in the USA ?
By Spuke on 2/1/2010 5:59:37 PM , Rating: 3
You forget one thing. The Volt looks stupid and the Tesla Roadster looks kick ass. Now if they were selling the Volt they first displayed it'd be a different story.
Thank God you're not selling cars. How can you compare a sedan to a 2 seat sports car? or how about a range extended electric with a pure electric? Sh!t, how can you compare a $100k PLUS car to a $40k one?

And my personal favorite whiny b!tch comment, "Whaaaaaa why doesn't the Volt look like the concept whaaaaaa?!!!! (said with sniveling nasally voice) For various reasons that have been explained, ad nauseam, it doesn't. GET OVER IT!!!

RE: Made in the USA ?
By bhieb on 2/1/2010 10:10:44 AM , Rating: 2
Wasn't there something about it being categorized as a "kit" car as well, and thus avoiding some safety requirements. I may be mistaking this for something else, but I do remember a car using a Lotus body in order to get it classified as a "kit" car.

RE: Made in the USA ?
By theapparition on 2/1/2010 9:29:40 AM , Rating: 2
On a more positive note, what is the best/easiest way for an individual to buy stock when Tesla IPO's ?

You'll be able to buy Tesla stock just like any other stock, nothing special about it after the IPO.

However, based on my experience, you as an individual will have virtually no chance whatsoever of buying that stock at the IPO strike price. If they release at say, $20/share, and it is quite a hot stock (verdict out on this now), than by the time you'll be able to purchase shares, the big banks will have already flipped the stock several times and the price will have run up 2X or more.

That may still be a bargain, but who knows without more investor information.

Back to the article; when did a low 50K vehicle become "somewhat competitive" to a low 30K car? 17k+ extra is quite a lot to swallow for most. Plus I doubt they will directly compete in the market place.

RE: Made in the USA ?
By bhieb on 2/1/2010 10:14:52 AM , Rating: 2
Also when can a limited range car such as the Tesla, be considered competition for the Volt which has no range limit.

Certainly the Tesla has a niche market of people who don't drive very far, but the two cars are not aimed at the same group of buyers.

RE: Made in the USA ?
By Brian H on 2/3/2010 9:42:24 PM , Rating: 2
240 miles (Roadster) and 300 miles (Model S with premium battery pack) is hardly a very limited range! That would cover about 99% of all car trips, I'd think. And battery tech is advancing at warp speed, with LiIon capacity expected to increase by up to 10X in the next 3 years or so. Drive 2,000 miles a day much?

And the Model S will lease/operate for about the same as a $30,000 gasser.

As for unlimited range, check out the power of the Volt gas engine. Better be prepared for a lot of slooowwww driving.

RE: Made in the USA ?
By Brian H on 2/3/2010 9:27:55 PM , Rating: 2
It carries (leases and operates) for about the same net total as a $30,000 gasser. By the time you figure fuel and maintenance and perks (free parking in many places, etc.) it's very competitive indeed. And a MUCH nicer product for the same annual outlay.

so this is what we're getting?
By The0ne on 2/1/2010 11:27:41 AM , Rating: 2
From C&D magazine of March 2010,

Tesla Roadstar,
"It had been 45min since leaving Munich with a fully charged 53kWh battery. So we are faced with exiting the autobahn and heading back to Munich or finding a facility to recharge the Tesla, not to mention something to occupy ourselves for the eight to 10 hours it would take."

Audi E-Trol and Mercedes SLS,

"53kWh battery weighs more than 1000 pounds" >.>!

"Audio claims a good 154mile on battery...only 42.4kWh used to lengthen the life of the battery"

"every KWh of battery storage currently cost roughly $1000" holy fck.

"depleted batteries would take about three hours to reenregize; a 220 source is 6-10 hours and a regular 120 source...more than 30 hours."

"Weber believes the car will be purchased as a green status symbol..." Translate, for the dumbasses out there with money to spill.

So to compensate for the added weight you make improvements and advancements in the material for the car to get it to ~4000lbs. If you ditch that stupid battery idea but keep the weight saving implementations then you have a 3000lb care which will be a better deal. Less weight is a bit less on the gas intake as well. But no, status baby.

Oh, and since it's 4000lbs and has paper thing materials, guess what happens when you get into an accident.

My commute to work is 45min, ONE WAY. Going to LA is 120mins. So I would stop halfway, charge for possibly 8-10 hours and continue? LMAO. Yes, I realize this is for the dumbasses out there and there's a few I've seen already.

I'm all for green but stupidity has to stop somewhere!

RE: so this is what we're getting?
By The0ne on 2/1/2010 11:47:38 AM , Rating: 2
Oh just wanted to add also that I don't usually mind spelling and grammar on blogs, especially when my touchpad makes them for me automatically, but C&D is one of the worst publication magazine ever.

Many of you car enthusiast will already know this, but I'll say it anyways. The grammar is so poor that from one sentence to the next you literally see improper word usages. For example,

"53 kilo-watt-hr....53-kWh" Yes, they can be interchangeable but why the fck would you continually use both.

Then the first quote...why the hell would you use "eight to 10 hours"? Either "eight to ten hours" or "8 to 10 hours". I mean, the last freaking sentence even uses just numbers.

Mind you this is C&D where the senior staff are old farts and retards. Retards because if you bother to real the mail section they have some of the most RETARDED responses ever. This applies to most magazines though. Some 10 year rice-out kid is being used to make all those smart-ass, pointless, dumb-founded, replies.

To add to insult, unlike other car publications C&D instead chooses to have each of it's car reviews with complete different graphs and charts. The very next review won't even have the tech specs like page of the vehicle right before it.

If I didn't get this magazine for free I be pissed. But man, we are really heading into a world of Idiocracy.

Labor costs
By Shig on 1/31/2010 8:24:59 PM , Rating: 3
Nuff said.

IPO? Really?
By borismkv on 2/2/2010 4:04:20 PM , Rating: 2
Doesn't a company have to post a profit for several years in a row to get an IPO? I smell a new bubble coming.

Rocky road to success
By siuol11 on 1/31/10, Rating: -1
RE: Rocky road to success
By invidious on 1/31/2010 8:56:30 PM , Rating: 3
The conventional auto industry never received any government support?

RE: Rocky road to success
By siuol11 on 1/31/2010 9:49:45 PM , Rating: 1
That's a road you want to go down again?
Just because someone else did it doesn't make it a good idea...

RE: Rocky road to success
By michal1980 on 2/1/10, Rating: 0
RE: Rocky road to success
By jimbojimbo on 2/1/2010 4:35:20 PM , Rating: 2
If you believe so strongly that they'll go down, just short their stock.

RE: Rocky road to success
By Helbore on 2/1/2010 9:00:45 AM , Rating: 2
I thought Tesla got a low-interest loan on a government green vehicle initiative, in order to build the plant for constructing the Model S. That's a fair sight different than being given money to stop them from going bankrupt.

Sure, Tesla might not have been able to diversify their range so quickly without this loan. But that hardly equates to "going bankrupt" when the firm was actually beginning to turn a profit on it's current sale of manufactured goods (ie. the roadster)

Really don't understand why Tesla gets so much hate from some people. They are a small start-up, trying to do something unconventional in a saturated market. But that Model S makes most other new cars look like relics of an ancient age. They are innoivating in ways the rest of the auto industry can't seem to be bothered with. It's possible they will never be a runaway success, but good on them for trying to change the rules of the game, I say.

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