Print 22 comment(s) - last by Brian H.. on Feb 3 at 9:42 PM

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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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.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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