The company that made electric vehicles cool again and dispelled the ugly golf cart stereotypes is rumored to file for an IPO very soon according to a recent Reuters report. What makes this CleanTech startup unique from say the recent A123 Systems IPO? Tesla is currently profitable! Profitability is one way to counter the IPO risks noted in this well blogged article about Goldman Sachs and their IPO business.
Tesla is on a mission to prove that Silicon Valley can do what Detroit, Tokyo and Frankfurt cannot. While some may think their Tesla Roadster (costs approx. $109k), which has a range of approximately 220 miles and Ferrari like performance, is a toy for the rich- a new Tesla Model S is in the works to dispel this theory and open the company to those with a smaller budget. The Model S will cost around $50,000, have 4 doors and appear similar to a nice Lexus, but more beautiful in my opinion. It also will not have any tailpipe emissions and will cost about $2 to power for 300 miles.
While Tesla’s automobiles are an evolutionary step as far as design, production and backing- they will nonetheless need to compete with companies like Nissan, GM, Fisker and Ford who all have both government backing, and either an EV or Plug-in EV in the works. Along with several battery makers including A123 Systems, Ener1 and Johnson Controls, Tesla received $465MM in low cost loans from the US government to help spur development. It is interesting to ponder whether or not the market for efficient automobiles will prefer plug in electrics, pure electrics or if it is large and wealthy enough for both. Signs point to the latter as several of these planned or existing cars, including Tesla’s, have a lengthy customer waiting list.
Tesla’s investors include Google, founders Sergey Brin and Larry Page, Daimler AG, Aabar Investments, Valor Equity Partners, Technology Partners, The Westly Group, Compass Venture Partners. Tesla has also received an ‘opportunistic’ US$82.5m equity investment from a group led by Fjord Capital Management, a private equity firm which focuses exclusively on clean energy. “Daimler, which invested US$50m in Tesla earlier in 2009, along with Aabar Investments, which is also Daimler’s largest shareholder, contributed to the offering to keep its stake at just under 10%. The new money was earmarked for Tesla’s expansion of its retail store network globally.”
The IPO would be the first from a US Automaker since Ford in 1956.