- June 29, 2010
- Posted by: Ted Bullen
- Category: Automotive, News
Tesla Motors, manufacturer of an electric luxury car, priced in excess of $100,000, beat expectations with its IPO, today, that gained more than 40% from its offering price. In fact, the Tesla IPO had the second-biggest first-day gain this year.
The Tesla IPO comes at a time where investors are risk-adverse base bothered by market volatility. They are, particularly, wary of companies with a history of losses or high debt levels. Tesla hasn’t had a profitable quarter since it was founded in 2003. It has sold only 1,000 of its vehicles.
The Tesla car is a high performance vehicle, with a top speed of 120 mph and a range of 245 miles per charge. Battery recharging time takes about 3 ½ hours via 240 Volt/70 Amp connection.
Tesla is not alone in the electric vehicle market. Li-ion Motors manufactures a vehicle that is similar to the Tesla Roadster in style with some performance enhancements. Li-ion Motors also retrofits existing automobiles with electric drive trains at more, consumer friendly prices. Nissan’s Leaf and Chevrolet’s Volt (a plug-in hybrid) are products of bigger-named manufacturers at more affordable prices.
Tesla’s planned Model S will weigh in at about $50,000 – still too high for most buyers – and isn’t slated to be ready for sale until 2012. It specifies a quirky option for rapid battery swaps so that you can travel further distances. The problem is that your trunk will be full of battery spares.
Electric vehicle development comes at a high risk. Battery technology is not sufficiently developed to replace petroleum fuel-based vehicles. Ultra-capacitor enhanced plug-in electric hybrids have promise (prototypes have been rated at 150 mpg in cross-country tests) and recharge rapidly. The chemical element is removed, which has been a hindrance in both performance and safety.
The big question, then, is does the Tesla IPO signal a wave of future electric vehicle manufacturer IPOs, with an accompanying paradigm shift in related infrastructure, or does Tesla represent yet another bubble that will burst under the weight of unfulfilled promise?