June 29, 2010

Tesla IPO posts strong gains

CARS - Electric car maker Tesla has gone public with an Initial Public Offering (IPO) of common stock. The interesting part is that they raised more money than expected on their first day of trading. (See Green Sports Cars.)

Shares of Tesla Motors Inc. soared despite markets in the USA being down 2% for the day, raising $226.1 million USD and selling 13.3 million shares at $17 USD each. (They were only expecting to sell 11.1 million shares at approx. $14 each.) At one point shares were trading as high as $19 and closed at $18.37 USD.

This strong performance suggests many investors want to invest in green technology.

Electric car maker Tesla is based in Palo Alto, California, makes the $109,000 Tesla Roadster and is also coming out with a more reasonably-priced family car in the near future.

“The response from investors has been tremendous,” says CEO Elon Musk. “We increased the size of the offering and the demand was still enormous, so we increased the price to a dollar above the top of the range and we still had massive, overwhelming demand.” CEO Musk is also a co-founder of PayPal and currently runs a space tourism company. He's known for his ability to build on trends for the future.

Tesla's design patents for batteries and drive system may become standardized in the future as the electric car market continues to grow sharply.

Tesla's upcoming $50,000 four-door electric sedan, the Model S will go on sale in 2012 and they're expecting to build a modest 20,000 per year.

Toyota Motor Corp. last month agreed to invest $50 million USD in Tesla and hopes to someday sell Toyota cars using technology being developed by Tesla.

Nissan is also coming out with an electric car, the $25,000 Leaf, as is General Motors with the $35,000 Chevrolet Volt.

See Also
Tesla Roadster proves electric cars can work
Toyota invests in Tesla
Behold, the Scorpion Hydrogen Supercar

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