U.S. electric-car maker Tesla Motors plans to go public soon, two sources familiar with the matter said, amid growing interest in green technology and battery-powered vehicles.
An IPO filing from the 6-year-old start-up, best known for its $109,000 all-electric Roadster, is expected any day, said one of the sources. The person did not give a specific time frame, although IPOs typically take several months.
Tesla spokesman Ricardo Reyes declined to comment on what he called "rumor or speculation."
Tesla Model S
(Credit: Caroline McCarthy/CNET)Tesla would mark the first public offering from a U.S. automaker since Henry Ford's Ford Motor debuted its shares in 1956. The IPO represents a landmark in the resurgence of electric-car technology that most carmakers had dismissed as impractical until recently.
The company's chairman Elon Musk said early last year that an IPO was a possibility in either late 2008 or 2009.
But the financial market turmoil following the collapse of Lehman Bros. in the latter half of 2008 virtually shut down the IPO market. The appetite for IPOs has picked up since mid-September this year with a robust pace of new filings.
Tesla's IPO would follow the successful debut of lithium ion battery maker A123 Systems, whose shares rallied 50 percent on their first day of trading on September 25.
Analysts have said that the success of A123, the first green-technology IPO this year, would encourage more venture capital-backed green companies to go public.
Tesla will compete with established automakers like Ford, General Motors, and Nissan Motor, all of which are racing to launch electric or plug-in hybrid vehicles. Tesla, by contrast, is a small player with a high-end market and limited production.
A combination of factors has driven the recent interest in developing electric, or partially electric vehicles, including the Obama administration's push to have 1 million rechargeable vehicles on U.S. roads by 2015 and low-cost Department of Energy loans for manufacturers.
Venture funds back green cars
The carmaker is developing a second, lower-cost model, an electric sedan known as the Model S, which will have a base price of $49,900.
Tesla said in September it delivered 700 Roadsters since February 2008. The Roadster, which is built on a Lotus frame, can go from 0 to 60 miles an hour in less than four seconds, making it faster than a Porsche 911 or a Ferrari Spider.
The electric-car start-up was offered $465 million in low-cost loans by the U.S. Department of Energy to help build the new Model S. Tesla said it will build the new car in California.
Tesla's investors include Google co-founders Sergey Brin and Larry Page.
Other investors include Daimler; Abu Dhabi-based Aabar Investments, which owns a stake in Daimler; and venture capital funds Valor Equity Partners, Technology Partners, The Westly Group, and Compass Venture Partners.
Tesla said it had achieved overall corporate profitability in July with about $1 million of earnings on revenue of $20 million.
But like established automakers, survival in the hyper-competitive U.S. automotive market has not been easy for Tesla. The company had to face cost overruns and production delays for the Roadster.
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Additional stories from Reuters
For 2010, Tesla updates its electric Roadster with a Sport version, featuring faster acceleration.
(Credit: Josh Miller/CNET)
Tesla often emphasizes that it works more like a Silicon Valley technology company than a traditional car company. And the company just proved it by delivering a model update to the Tesla Roadster for 2010. Remember, the Roadster has only been in production for one year, but in that time Tesla completely redesigned the interior, while at the same time adding new materials to reduce cabin noise. Model updates from other automakers often take five years.
We spent a day with the 2010 Tesla Roadster Sport, enjoying its unique driving experience and finding these updates made the previous generation car seem like something hacked together in a garage. Where the previous car had a fussy little lever for putting it in drive, the new car uses push buttons. To check battery statistics and change the drive mode, you had to use a touch screen by your left knee. That touch screen has been moved to the center of the dashboard. And in a real step toward convenience, the Tesla Roadster now comes with a glove box.
The rear air intakes get clear coat carbon fiber inserts.
(Credit: Josh Miller/CNET)Externally, the casual observer won't see much difference. The Tesla Roadster uses the same Lotus-sourced body clad in carbon fiber. But the carbon fiber stands out more, as clear-coat panels make up the hood, spoiler, and even the insets in the rear air intakes. The suspension is now adjustable for comfort or sport, and the all-new Sport version of the Roadster uses an upgraded power train that rockets it to 60 mph in 3.7 seconds, faster than the standard Roadster's 3.9 second time.
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View the latest prices for 2010 Tesla Roadster Sport
Simon Hacket and Emilis Prelgauskas at their 313-mile mark in Coober Pedy, South Australia.
(Credit: Hackett)A record for a Tesla Roadster driven on a single charge was set at 313 miles (501 km) in Australia on Tuesday.
Tesla Roadster owner Simon Hackett and his friend Emilis Prelgauskas drove his electric sports car from Alice Springs, Northern Territory, to Coober Pedy, South Australia, as part of an alternative-fuel vehicle rally called the Global Green Challenge.
The Tesla's electric-charge port door was sealed shut at the start of the 313-mile journey and the trip was filmed for a documentary, as well as monitored by contest officials. The Tesla's lithium ion battery, which the company assures owners will last over 200 miles between charges under normal driving circumstances, had 3 miles to spare when the team reached its destination in Coober Pedy, according to Hackett's chronicles of the race experience on his company blog. (Hackett happens to also be the founder and managing director of Internode, an Australian national broadband and Internet services company.)
Hackett said in his blog the achievement is actually a record for any production electric car, not just a Tesla Roadster, which is why his team was so careful to record it. To squeeze as much distance out of the Tesla's battery as they could, Hackett and Prelgauskas tried to drive at a consistent speed of 55 kph (roughly 34 mph) for a large portion of the almost 12-hour journey.
"The security seal was applied to the charge port door when we started the journey. As this is being done as part of the Global Green Challenge, we have a full set of official verifiers here who will attest to the results and to achieving the outcome. We were followed along the journey by our support crew and a documentary film crew--so we have it on film," said Hackett.
While Tesla Motors is not an official sponsor of the contest or Hackett, the company has shown support by spreading the news of Hackett's success. It's not hard to imagine why as Tesla poises for a major retail expansion.
The stunt may certainly speak to consumers who likely drive nowhere near 313 miles in a single day, but are still reluctant to hem themselves in with a car restricted to a limited number of miles between recharges.
Tesla Motors and co-founder Martin Eberhard announced an agreement over who can claim to be a founder of the company on Monday.
Tesla founder Martin Eberhard on the road with his Tesla Roadster.
(Credit: Martin Eberhard)Eberhard filed suit against the luxury electric vehicle maker in June, alleging that current CEO Elon Musk sought to "rewrite history" about Eberhard's role after Eberhard was ousted from the CEO position. Eberhard was seeking damages because comments from Tesla executives had harmed his reputation.
On Monday, a Tesla representative said that Eberhard and other principals in the dispute have come to an agreement. The company did not reveal any details of the resolution, except to say that there are now five, rather than two, agreed-upon "founders" of Tesla.
In addition to Eberhard, other founders include current CEO and chief product architect Elon Musk, current chief technology JB Straubel, Marc Tarpenning, and Ian Wright.
Both Eberhard and Musk, who have bickered publicly and through the courts, issued statements praising each others' contributions to Tesla.
An out-of-court resolution appeared to be Eberhard's best option for repairing his reputation after a San Mateo, Calif., judge in July dismissed that portion of his suit.
Tesla Motors in Los Angeles, Calif.
(Credit: Tesla Motors)Tesla Motors has garnered $82.5 million in "Series F" funding for the purpose of expanding its chain of stores in North America and Europe.
The deal was first announced Monday by participating investor Fjord Capital Partners. Tesla Motors then confirmed the deal to several news outlets on Tuesday. Daimler, already a 10 percent investor in Tesla, and Abu Dhabi fund Aabar Investments also contributed to the fund.
The California-based electric-vehicle manufacturer has had stores in Los Angeles and Menlo Park, Calif., for some time. It recently opened stores in New York, Chicago, Miami, London, Seattle, and Munich. It has plans to open a store in Monaco before the end of the year, and has said it's scouting for locations in Washington, D.C., and Toronto.
But don't call them dealerships.
Because the electric cars are light on service work, and don't need things like oil changes, Tesla plans to forgo the traditional dealership/service business model of yesteryear's car industry. Instead the company plans to maintain full retail control over its cars and brand, Tesla announced in early September.
Tesla Motors in Menlo Park, Calif.
(Credit: Tesla Motors)"Tesla takes its showroom cues from Apple, Starbucks and other customer-focused retailers. Tesla stores provide a welcoming spot to surf the Web, test drive cars and learn more about Tesla, the only production automaker selling highway-capable EVs in North America or Europe," Tesla said in statement.
News of the latest funding deal also follows the unveiling of Tesla's production model of the Model S sedan, as well as a tuner version of its Roadster, at the 2009 Frankfurt auto show this week.
The prototype of the Model S was unveiled in March as a way to augment Tesla's lineup with a more "economical" option to its Roadster luxury sports car. The Model S is expected to cost around $50,000--about half the cost of the Roadster.
(Credit:
Tesla)
Upstart Tesla Motors proved the time is ripe for a new car company, reporting a profit of approximately $1 million on revenue of $20 million for the month of July. Tesla reduced its cost to build its electric sports car, while introducing the more expensive Roadster Sport model to its model line-up. The company shipped 109 cars in July, its highest output to date, reflecting an improved assembly process at its Menlo Park, Calif., facility. Tesla reports expanding sales to European customers for the third quarter, along with expansion into other countries, including Russia.
Earlier this year, Tesla won a $465 million government loan to develop the Tesla S, a sedan the company will use to expand its model line-up. Through a partnership with Daimler, Tesla power trains will be used in a fleet of 1,000 electric Smart cars, hitting the road later this year.
The Tesla Roadster
(Credit: Tesla Motors)A San Mateo County Superior Court judge on Wednesday denied former Tesla Motors CEO Martin Eberhard's request that he be declared one of only two Tesla founders, according to a statement released by Tesla Motors late Wednesday night.
"We agree that Eberhard's claims on the question of who founded Tesla have no merit. We look forward to proving the facts in court as soon as possible and setting the historical record straight," Tesla's current CEO Elon Musk said in a statement.
The ruling is in keeping with Tesla's claim that the company was founded by a team of several people, including Musk, rather than just two men.
The court ruling and subsequent press release are just the latest volley in an ongoing public battle of words on the Internet and facts in the courtroom between Tesla and Eberhard.
Eberhard is suing Tesla and Musk for libel and breach of contract.
Nissan demonstrates a viable electric power train in this test mule.
(Credit: Antuan Goodwin/CNET)Updated at 11:35 a.m. Tuesday with further loan details.
The U.S. government, which plans to kick-start development of a new generation of fuel-efficient automobiles through the Advanced Technology Vehicles Manufacturing Loan Program, announced on Tuesday some loan application winners.
Ford Motor gets loans totaling $5.9 billion, going to a variety of fuel efficiency initiatives, while a $1.6 billion loan to Nissan is intended to help it refit a Tennessee plant for electric car production.
Tesla Motors is also a winner under the program, getting a $465 million loan, most of which will be used to build production facilities for the recently announced Model S electric sedan.
The $25 billion Advanced Technology program has been in discussion for some time, and automakers have been lining up to get loans under the program. A stipulation that only viable companies can get loans under the program caused General Motors and Chrysler's applications to be turned down, though both companies have developed hybrid and electric-car platforms.
Ford announced plans earlier this year to release an electric vehicle in 2011, co-developed with parts supplier Magna Steyr. The company will use its loans to produce that vehicle, along with a commercial electric vehicle based on its Transit model in 2010.
Nissan has been one of the leaders among the major automakers in advancing a pure electric car, promising to make one powered by a lithium ion battery pack on U.S. roads in 2010.
As a technology demonstration, Nissan has shown its EV-02 test mule to journalists, an electric car using the Nissan Cube platform, getting a range of about 100 miles. The company is designing its Tennessee plant to produce 150,000 electric cars per year, and associated battery manufacturing will produce 200,000 lithium ion packs per year. The plant is slated to begin production in 2012.
Other aspiring automakers still await a decision. One such applicant, Indiana-based Bright Automotive, plans to build a commercial plug-in hybrid electric vehicle for fleet use. The company has received no word or time line on its application.
Tesla Motors Chairman and CEO Elon Musk
(Credit: Tesla Motors)The legal battle and war of words between two Tesla Motors CEOs are heating up.
Current Tesla Motors CEO Elon Musk responded in a lengthy company blog on Monday to a lawsuit charging libel and breach of contract from former CEO Martin Eberhard. In his blog, Musk dismisses Eberhard's claim that Eberhard was responsible for many of Tesla's key achievements, one of the key points of the suit.
Among other comments, Musk writes: "The facts are that when I requested through AC Propulsion to meet Eberhard, he had no technology of his own, he did not have a prototype car and he owned no intellectual property relating to electric cars. All he had was a business plan to commercialize the AC Propulsion Tzero electric sports car concept. Three years later, when Eberhard was asked to leave Tesla, most of the work that he had been paid to do had to be redone."
The battle started when Eberhard filed suit again Musk and Tesla, alleging that Musk was trying to "rewrite history" by taking credit for key accomplishments behind Tesla Motors.
Electric car maker Tesla has been in legal waters before. Last November, the company lost a lawsuit against Fisker Automotive, alleging that Fisker had stolen trade secrets. Last July, former Public Relations Director David Vespremi filed a suit, which was dismissed, against Tesla saying the company violated his terms of employment.
In the wake of layoffs and canceled orders, Tesla has been busy trying to drum up cash to fund its development and manufacturing. The company has applied for a Department of Energy loan to finance construction of a factory.
Corrected at 2:15 p.m. PDT: This article initially misstated the status of Tesla's loan application to the Department of Energy. It has applied for a DOE loan but has not yet received it.
NEW YORK--"I'm anti-tax, but I'm pro-carbon tax," Tesla Motors founder Elon Musk said onstage at the Wired Business Conference here Monday--a remark that prompted interviewer and Wired editor-in-chief Chris Anderson to quip that he was a "true Silicon Valley libertarian."
Tesla Motors Chairman and CEO Elon Musk
(Credit: Tesla Motors)Gasoline "should probably be $10" per gallon, said onetime PayPal co-founder Musk, who is also attempting to make sending satellites into space cheaper with a start-up called SpaceX. "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."
Musk's company has put out the Tesla Roadster, a pricey sports car that runs exclusively on electric power. On the way is the Model S, a more affordable sedan. Separate from the technology, Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract.
Musk's rash attitude and devotion to cutting-edge innovation has constructed him as a figure less than willing to compromise. He didn't sound too satisfied, for example, with the level of innovation in the Toyota Prius, the car that is practically synonymous with environmental consciousness in the auto industry.
"A Prius is not a true hybrid, really," he said. (A plug-in Prius is on the way.) "The current Prius is like, 2 percent electric. It's a gasoline car with slightly better mileage."
That said, Tesla shines quite a bit brighter due to the utter disarray of the U.S. auto industry, with major automakers falling into bankruptcy and Detroit in a continuing downward spiral. This, according to Musk, was the inevitable result of a completely broken system.
"Great companies are built on great products," he said, and when those products take a turn for the worse, so does the company. Automakers, Musk theorized, focused too much on the money rather than innovation. "The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design."
Musk said that unions weren't inherently the problem but the way that they were structured was. "It's not out of the question to have unions. But if they do have a union, they've got to understand that they're on the same side of the company," Musk said. "I really am kind of against having a two-class system where you've got the workers and the management sort of like the nobles and peasants." In other words, Musk thinks Detroit could use a dose of Silicon Valley corporate culture.
Surprisingly, Musk implied that Detroit will survive. "I think it'll probably be a healthier place. This has been somewhat cathartic. Maybe, I think, maybe I'm being overly optimistic, but I think this will be a cathartic experience," Musk said. "I think GM and Ford, maybe not Chrysler, but GM and Ford will come out of this healthier...and more competitive."
He wants Tesla to be part of that, obviously.
"I'd like to take up some of the manufacturing plants," he said. "When the mess gets sorted out I'd like to have a conversation with whoever's in charge."
