Faster than a Ferrari, cleaner than a Prius, Tesla’s EV roadster is only $100,000: Is this reason for Tesla’s high IPO result?
Tesla Motors, already a popular concept in Gulf countries, but whose high performance electric sports car has not turned a profit for them in the company’s seven year of operation, has suddenly put at least some of their financial woes behind them, by raising $188 million in a recent IPO (initial public offering) on the NASDAQ stock exchange in New York. Compared to other electric car ventures, including Better Place (whose battery swapping technology will be featured in Renault autos, beginning in 2011) which recently received funding of $350 million from the HBSC banking group, Tesla has been specializing in making very expensive high performance sport models that only the very rich and affluent can afford to buy.
Tesla’s shares, issued at the NASDAQ IPO offering at $17 each, shot up “like a rocket” and reached the mid $20’s by the end of the trading day with considerable gains for Middle East buyers:
Abu Dhabi’s Al Wahada Capital Investment took a 7.8 percent stake in Tesla, a stake now worth about $174 million USD, while the quickest return was on the investment made by Japanese automaker Toyota Motor Corp, which bought $50 million USD worth of shares in a private placement at the IPO price. That is now worth about $70 million USD Arabian Business reports.
In comparison, other NASDAQ stocks were heading in the other direction, making the Tesla IPO one of the few positive performers. The US Government, with it’s current interest in offering support for green transportation ventures, has given Tesla a loan of $465 million to help the company develop it’s $100,000 sport roadster.
One hundred thousand dollars is a heck of a lot of money for any car, especially an electric two-seater coupe (there is a tiny back seat that only a small child or a midget can sit in). Financial assistance of that nature should best be awarded to companies who will be offer a much more practical, and cheaper, electric car. But the company plans on producing 20,000 EV sedans per year.
If Better Place and other companies work out a final deal with the Chinese Chery Automobile Company Ltd, the funds would be much better invested, as this car would be much more practical, as well as affordable.
“People need to appreciate that if we were just making the Roadster, we’d be profitable. But we’re in massive expansion mode.”
The “rapid expansion mode” may be referring to company plans to produce a Model S Sedan that executives and even families can drive in, and which will cost about half the price of the roadster.
There are doubts that Tesla’s cars, which presently only have a cruising range of 160 miles, will ever be popular – unless they work out a battery exchange plan like that of Better Place or can improve on the life of the battery charge: “It remains to be seen that this type of car, even in a sedan version, will become popular due to its limited cruising range and long battery recharging time” said Jack Nerad, of Kelly Blue Books, one of America’s top new and used car buying guides.
It appears from all this that perhaps Tesla might find some purchasers for its roadsters in oil rich Persian Gulf countries like Abu Dhabi, where expansive cars are commonplace, including specially ordered ones like white gold Mercedes Benzes.
Why not make an electric version of one of these jobbies?
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Photo via Tesla