Reuters Reports Tesla Preparing an IPO; Electric-Car Maker Declines to Comment
By Scott Doggett November 20, 2009
Electric-sports car maker Tesla Motors plans to go public soon, Reuters reported today, citing two sources familiar with the matter said.
An IPO filing from the six-year-old start-up, best known for its $109,000 all-electric, zero-emissions Roadster, is expected any day, the news agency quoted one of the sources as saying. The person did not give a specific time frame, although IPOs typically take several months.
Tesla spokeswoman Rachel Konrad, in an interview with Green Car Advisor, declined to comment on what she called "rumor or speculation."
Tesla would mark the first public offering from a U.S. automaker since the Ford Motor Co. 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 Sept. 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.
More to the point, if Tesla does go public and experiences the kind of financial boost A123 did, the investor acceptable will be a huge shot in the arm not only for Tesla but for electric vehicles and EV-related technologies in general.
In addition to the success A123 experienced with its IPO, Tesla has another good reason to prepare an IPO now: The automaker is flush with cash from recent federal low-interest loans, which makes investors more comfortable than pumping money into a flat-broke startup.
A huge infusion of cash now would greatly benefit Tesla, which will soon compete with established automakers such as Ford, General Motors and Nissan Motor Co., 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.
That said, Tesla 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 zero 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 Inc founders Sergey Brin and Larry Page.
Other investors include Daimler AG; 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.
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