Tesla’s IPO, Slated For Tuesday, Looks Hot

June 28, 2010

Tesla Motors is gushing money like a Gulf of Mexico oil well, but its IPO looks like a big strike.

The upstart electric car company on Monday said it would launch its first public shares on Tuesday at between $14 and $16. It also raised to $211 million the amount of cash it hopes to make from the deal, the second time it has lifted the target.

Tesla Motors' IPO is said to be over subscribed, meaning there is more demand than shares. Tesla makes the electric Roadster.

The confidence suggests demand for the shares is high, despite losses at the company that will extend for several more years. The target was initially $100 million and was raised to $178 million two weeks ago.

According to a Monday filing with the Securities and Exchange Commission, Tesla will now sell as many as 13.3 million shares to the public in the first offering of a car company since Ford went public in 1956.

Investment bankers told MarketWatch that the offering is broadly over subscribed, meaning that more people want to buy shares than there are shares available. Speculation is the stock will be priced closer to $16 than $14.

Once the shares begin trading, Tesla will sell $50 million of additional stock to Toyota as part of a deal that has Tesla buying Toyota’s Fremont, CA, manufacturing plant for $42 million. Toyota agreed to the investment in Tesla to secure a joint development arrangement.

Tesla’s first electric car, the $109,000 Roadster, has done only modestly well since it was launched in 2008. Just 1,063 of the cars have been sold in 22 countries. Another 110 orders remain unfilled.

Instead the bet on Tesla is on the success of its more affordable second car, the $49,900 Model S sedan. The price includes a $7,500 federal tax credit.

A third-generation electric car with an even lower price is expected after that. Here is an analysis of its per-car losses.

Tesla says its long-term aim is to build a business model that can be profitable on a low volume of cars. But it also cautions that it expects losses to increase significantly in coming years as it designs the Model S, equipments the Fremont factory and expands it sales force.

Investors seem to be looking beyond all that.

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Posted by Mark Boslet

Gm Snuggles Up To Google, Shows Off The Electric Volt

May 19, 2010

General Motors snuggled closer to Google on Tuesday by announcing it will use Google Maps to add location-based features to its Chevy Volt mobile app.

The carmaker said that with the release of version 2.0 of the app running on Google’s Android software, the smart-phone application will pinpoint the location of cars, even transmit voice-guided directions.

GM offers test-drives of the Chevy Volt. The verdict: largely favorable, with peppy acceleration and tight handling

GM unveiled the mobile app in January at the Consumer Electronics Show. In its present form, it allows owners of the upcoming Volt electric hybrid to check battery charge levels, unlock doors and start engines.

The joint development with Google is clearly a feather in the cap of GM’s OnStar, which is developing the app. Mobile apps are among the hottest trends in technology, and location-based services make a great deal of sense in cars.

But the real news Tuesday was the Volt itself. GM has been guarding details of the car’s feel and handling, and it cast aside the curtain to offer test-drives to a handful of San Francisco journalists. The verdict: largely favorable.

The Volt is GM’s first foray into the emerging electric car market, and instead of a tiny lightweight two seater, it is a roomy-enough mid-sized vehicle in keeping with the majority of cars on the road today.

It boasts respectable economy, with a 375-pound lithium ion battery from LG Chemicals capable of a 40 miles range. The 16 kWh battery has 220 cells and a GM designed heating and cooling system to preserve performance in cold and hot weather. Both heat and cold weather can rob a battery of its charge.

When it drains, a 1.4-liter, 4-cylinder gasoline powered generator kicks in to provide juice to the electric motor.

The car has a comfortable feel on the road. Its shocks are soft enough to absorb the ride and its steering is tight. Like many cars with high-efficiency electric motors, the vehicle has pep and is responsive.

GM is fond of say, it feels like a car, and it does, with the exception that it is quiet. The pleasure of leaving a parking spot with little to no noise is hard not to appreciate.

GM created uncertainty about the Volt by warning the production model, expected before the end of the year, will differ from the prototypes it is showing off. But Tony Posawatz, vehicle line director, put some of the questions to rest.

“The (exterior) look is pretty much representative of what you’ll see in production,” he said. Some small interior changes could take place.

But Posawatz did not solve the biggest mystery: the price. GM has suggested the car could cost about $30,000 after a $7,500 federal tax credit. But late summer is when the sticker will be finalized, he said. “We’re still working through some details.”

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Posted by Mark Boslet

Overdrawing Electric Car Batteries Without Damaging Them

April 2, 2010

Range anxiety is the biggest drawback to electric cars. When the battery is dead, so are you, perhaps miles from the nearest charger.

What if you could miraculously find extra miles in such a situation? Such a possibility is theoretically possible, says Indian electric carmaker Reva Electric Car.

Reva hopes to provide an emergency power system with its next generation electric car

According to the company, electric cars hold a certain amount of battery power in reserve to protect electrical systems, such as electrodes, and extend the life of the battery. This reserve can be as high as 30 percent of capacity.

So how do you draw on this extra juice in an emergency? An interesting post on the IEEE Spectrum blog explains how Reva is working on just such a system to give consumers access to their power reserves. It is not the only carmaker doing so. Daimler is testing a similar system, and Honda has one as well.

Reva says the procedure is complicated and needs to factor in numerous variables, such as daytime temperatures, a battery’s age, its recharge history and how aggressively a car has been driven.  No algorithm can be easily adapted for every car.

Reva says its system (REVive) will remotely communicate with cars to retrieve operating data, store it for three years and compare it to the 84 million miles of driving data it has from other electric cars. When the need arises, the system checks the data and calculates how much power is available. Then it puts the car in a slow “limp” mode and a driver can drive to a charging station.

The danger is in draining a battery too frequently. Deep discharges can shorten battery life. But the damage is minimal if batteries are depleted only once in a while.

However, if this helps alleviate range anxiety and the fear of being stranded miles from home, it will do a wonderful service to the electric car industry. It will also fill up our airways with reams of routine operating data and give a boon and headache to cellular service providers.

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Posted by Mark Boslet

Think Electric Comes To New York As EPA Dramatically Lifts Vehicle Mileage Standards

April 1, 2010

Did Think know today would be the day.

Amid the onslaught of electric car news this week, Norway-based Think picked Thursday to announce it would begin selling its tiny, two-seater plug-in electric car in New York and other U.S. cites by the end of the year.

With Think's tiny Think City electric on the way to New York, the EPA for the first time set a limit for CO2 emissions from passenger cars.

Sure, the announcements have been coming one after another all week from the New York International Auto Show. Hyndai lifted the covers on its first battery-powered vehicle, while Mitsubishi promised a bigger electric push in China and electric car Smith got $22 million from the DOE. Upscale player Porsche added that its Cayenne would become a hybrid.

But little Think stole the cake. On the day the EPA and the Transportation Department released dramatic new improvements to US. vehicle mileage standards, Think said it was already there.

The U.S. rules from the green-conscious Obama Administration represented a dramatic shift in the way the government looks at vehicles. For the first time, they include limits on the greenhouse gas CO2, a major contributor to global warming.

The new standards raise mileage requirements almost 40 percent to 35.5 miles a gallon for a carmaker’s fleet average  by 2016. Government officials said this would save the average driver of a car or light truck $3,000 a year in fuel costs over the life of a vehicle.

With this backdrop, Think highlighted the features of its car: a choice between lithium ion and sodium batteries and a 100 miles range between charges. Production presently takes place in Finland, but a Indiana factory is planned for 2011.

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Posted by Mark Boslet

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