Car is said to go from 0 to 50 in two seconds and have a top speed of 112 mph. No production dates.
Renault DeZir Electric Concept Car (Think Tesla)
July 9, 2010
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Posted by Mark Boslet
Tesla Targets 50 Stores, Hires Former Apple Retail Exec
July 8, 2010Tesla Motors said Thursday it hired George Blankenship, the former architect of Apple’s successful retail store rollout, to lead an ambitious retail expansion that targets 50 showrooms over the next few years.
Blankenship, 57 and a 20-year GAP veteran, is to build out the carmaker’s global network of stores to coincide with the launch of the Model S sedan in 2012.
The Palo Alto carmaker, which last month launched a $211 million IPO, presently has 13 showrooms with eight located in the United States. Its retail strategy has not been widely reported. But the strategy is an ambitious effort to control its own sales and service operations and capture the revenue and customer feedback that traditional auto manufacturers cede to a network of dealers.
Tesla's Newport Beach store opened this month. The company hopes to have about 20 stores by the end of the year and about 50 over the next several years
Tesla said Blankenship should be a crucial piece of the puzzle. He comes to Tesla from Microsoft, where he landed last year to emulate Apple’s retail strategy. His service with Apple began in 2000. As vice president of real estate, he started to identify and acquire retail locations. A year later, the company opened its first store.
Prior to that he was responsible for opening more than 250 stores a year at the GAP.
At Tesla, Blankenship’s first job will be to open stores in Tokyo, Toronto and Washington, D.C. That is the tip of the iceberg. The company’s plan is to have about 20 showrooms in operation by the end of the year and about 50 in place over the next several years. Tesla stores today are in major metropolitan areas, including Los Angeles, New York, London, Chicago, Monaco, Munich and Menlo Park.
The company claims its retail strategy is one of efficiency. “We believe we will…be able to better control costs of inventory, manage warranty service and pricing, maintain and strengthen the Tesla brand, and obtain rapid customer feedback,” it says in a recent filing with the Securities and Exchange Commission.
“Further, we believe we will avoid the conflict of interest in the traditional dealership structure inherent to most incumbent automobile manufacturers where the sale of warranty parts and repairs by a dealer are a key source of revenue and profit for the dealer but often are an expense for the vehicle manufacturer,” the filing continues.
Because Tesla does not need to carry a large inventory, the stores don’t have to be large or include extensive floor space. That by itself will be a major departure from the traditional model. Still, they aren’t cheap. In 2009, the average cost was $500,000. Costs could rise to between $500,000 and $1 million. This should give Blankenship plenty of room for creativity.
Leave a Comment » | news | Tagged: Electric Cars, Retail Strategy, Showrooms, Stores, Tesla Motors | Permalink
Posted by Mark Boslet
Shares Of Tesla Pop But Fisker’s Karma Is On Hold
June 29, 2010Wall Street’s love affair with Tesla Motors got off to a romantic start on Tuesday. The company’s newly issued stock advanced 10 percent in a decidedly negative market that saw the Dow Jones Industrial Average sink 270 points.
Meanwhile Fisker Automotive’s Karma went negative. The company has acknolwedged a second delay in the release of its plug-in electric sports car.
Tesla’s IPO went out of the blocks at $17, above the expected $14 to $16 share price, an indication that demand was strong. And strong it was. The stock climbed to $19 before settling back to $18.73, up $1.73. The question, of course, is how long the good feelings last. Tesla will post losses for several years as it spends mightly to get its more affordable (and yet still $50,000) Model S sedan to market.
Fisker Automotive has a different job to do. Volume production of the sleek Karma is now expected to start in the first quarter of next year, not this summer as the Energy Department promised when it awarded a $529 million government loan to the company last year. Fisker is blaming financial, not technical, difficulties for the slip.
Despite the delay, the muscle-bound Karma casts a long shadow. We ran into a Karma prototype last weekend at a car show in Silicon Valley (seee pictures below). The four-door luxury has two, 201-hp electric motors and a top speed of 125 mph. After 50 miles, a gasoline-powered generator kicks in to recharge the lithium-ion battery pack. The car will sell for between $88,000 and $115,000.
Karma’s profile is sleek and curvy. It boasts a top speed of 125 mph and will accelerate from zero to 60 in 7 seconds. An optional solar panel built into its roof runs a fan.
For a sports car, the Karma’s interior is roomy and the dashboard uncluttered. The car’s center console includes a display screen The back seat, however, is tight.
The car is anything but boring to look at. A cutaway side panel stands out from behind. The trunk has room for two golf bags.
2 Comments | news | Tagged: Electric Cars, IPO, karma, Karma Automotive, roadster, Tesla Motors | Permalink
Posted by Mark Boslet
Tesla’s IPO, Slated For Tuesday, Looks Hot
June 28, 2010Tesla 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.
Leave a Comment » | news | Tagged: Electric Cars, Hybrid Cars, IPO, roadster, Tesla Motors | Permalink
Posted by Mark Boslet
Mergers Seen As Clean Tech’s Financial Lifeline
June 28, 2010Earlier this month, Solar panel maker Solyndra cancelled its IPO citing current market uncertainties.
It was not alone. Six other companies cancelled theirs the same month, though they were not in the clean-tech business.
Tesla Motors will soldier on and sell stock to the public on thsi week. The shares may even get a warm reception, despite that the company’s $290 million of losses since its founding seven years ago.
Venture capitalists predict a wave of mergers and aquisitions in clean tech.
These days Tesla is looking more like the exception rather than the rule. Other clean-tech companies have IPOs in the pipeline, Amyris and Zipcar, for example. Still others, such as Silver Spring Networks, will likely get favorable receptions if they decide to launch their own deals. (Speculation is Silver Spring could announce in July.)
But it appears more likely clean-tech start-ups and venture capitalists will make money and fund company expansion with mergers and acquisitions rather than new stock offerings. With the window for IPOs once again shutting, M&As could find themselves on the rise.
“I think we are likely to see a huge wave of M&A kicking in for clean tech,” says Alan Salzman, CEO of Vantage Point Venture Partners. The growing maturity of young companies will fuel it.
There are signs of a building wave already. In the first quarter, clean-tech companies logged 197 M&A transactions compared with just 13 IPOs, according to Cleantech Group. Despite a long list of companies registering for stock sales in the U.S., most of the IPOs – eight – took place in China.
And while the IPOs were off 28 percent from the fourth quarter, mergers and acquisitions seem on the rise. In 2009, 505 deals took place globally, or an average of 126 a quarter.
A noticeable share of the action so far involves solar technologies. Germany1 Acquisitions of Germany, for instance, paid $775 million to acquire AEG Power Solutions, a maker of inverters for solar panels, while late last year Siemens agreed to buy solar thermal company Solel of Israel and SunPower took out SunRay Renewable Energy, the Italian solar plant developer, in February.
In China, GCL-Poly Energy Holdings bought polysilicon wafer maker Jiangsu Zhongneng Polysilicon Technology Development.
But other deals looked beyond the segment. Solar City, for instance, announced in May it would buy the assets of energy remodeling contractor Building Solutions.
Erik Straser, a partner at Mohr Davidow Ventures, says the coming wave of deals could bring higher prices than comparable deals in high tech. That’s because target companies will need to be more mature, and their businesses will need to present obvious benefits to acquirers, such as a General Electric.
A GE acquisitions manager will need to show clear business benefits before a deal is done, he says. That clarity of purpose comes at a price.
7 Comments | news | Tagged: Anyris, Clean Tech, General Electric, Initial Public Offerings, IPO, Solar Energy, Tesla Motors, Venture Capital. Start-ups, Zipcar | Permalink
Posted by Mark Boslet
Tesla’s Leap Of Faith: IPO To Launch June 29
June 15, 2010I don’t get it.
Tesla Motors makes the highest performing electric car on the road today. But it is spilling red ink and the prospects of a reversal are many years away.
Now it has raised the amount of money it anticipates from its IPO to $178 million, well above the original target of $100 million. The company will need a patient group of stockholders.
Battery packs for Tesla's Roadster electric sports car. Can the company turn its red ink to black in next five years?
The Palo Alto carmaker announced Tuesday it will sell 11.1 million shares to the public on June 29 for a price of between $14 and $16 a share. The offering will attract proceeds of $155 million to $178 million.
With underwriters such as Goldman Sachs, Morgan Stanley, J.P. Morgan and Deutsche Bank Securities, one would imagine the temperature of prospective stockholders has been taken. That temperature must be relatively hot considering the 78% increase in the size of the initial public offering.
But for these buyers, the bet on Tesla is anything but a sure thing. The company sold only 1,063 of its $109,000 Roadsters through March and plans to discontinue production in 2011. The car is a technical dynamo, accelerating to 60 in 3.7 seconds and traveling 236 miles between charges.
But the halt in production will leave Tesla without a vehicle until its “every-man’s” car, the Model S sedan, launches in the 2012. But even this people’s car will be geared toward buyers with real money in their pockets, limiting its market appeal. It will start at $49,900, after subtracting the $7,500 federal alternative vehicle tax credit that may or may not remain in place – well more than the $33,000 Nissan Leaf and the expected $38,000 Chevy Volt.
For some shareholders, the real bet on Tesla may be a five-year or more gamble that looks beyond the Model S. In May, the company said it will develop a third-generation electric car with a lower price than the Model S and higher volumes. The model will be built at the Fremont auto plant the company plans to buy from Toyota, but won’t be on the showroom floor for a “few years” after the introduction of the Model S. That suggests it is five years away.
Until then, company finances are a real question mark. Tesla, since its inception, has recorded revenue of $147.6 million and an accumulated loss of $290.2 million. That amounts to red ink of $273,000 a car.
In fairness, the accumulated loss includes start-up and development costs that won’t need to be repeated. So for sake of argument, assume Tesla sold half its Roadsters in 2009 (the car has been on the market for about two years and 2009 is half the period). With losses of $55.7 million in 2009, the deficit per car falls to $105,000.
So how much further will it fall with the Model S? That is a key question for investors. The company intends to make up to 20,000 Model S sedans a year. That will generate revenue of about $1 billion. If costs were to fall to $50,000 a car, the losses would also be $1 billion – breakeven.
Tesla suggests its finances may look more appealing. In a filing on Tuesday with the Securities and Exchange Commission, the company says its goal is to design a business model that can generate profits on a low volume of cars.
As if to prove the point, the company says its capital expenditures, and its research and development spending to design and build the Roadster come to $125 million, or only slightly more than the $116 million in revenue it earned if each car sold for $109,000.
And yet, Tesla hits a cautious note as well. “We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of the Model S,” the company says in its filing.
Then it adds: “We expect the rate at which we will incur losses to increase significantly in future periods” as the company designs the Model S, opens new stores, equip its Fremont plant and expands its sales force.
For many investors, buying in to the IPO will be a leap of faith. It will be interesting to see how deep that faith runs.
6 Comments | news | Tagged: Chevy Volt, Clean Tech, Electric Cars, Model S, Nissan Leaf, roadster, Tesla Motors | Permalink
Posted by Mark Boslet
California City Bemoans Tesla’s Departure (Even Before It Arrived)
May 21, 2010The painful fallout of Tesla Motors’ decision to locate its new manufacturing plant in Northern California befell the Los Angeles community of Downey.
Tesla will make its Model S sedan in northern California. the southeast Los Angeles region was betrayed, said Downey Councilmember Mario Guerra.
Downey was convinced Tesla would open its first factory inside its municipal borders, delivering 1,200 jobs to the region. It was so convinced that city officials claim to have been hours away from signing a lease with the electric car upstart – after months of negotiating.
Instead at the last minute, Tesla announced an agreement with Toyota on Thursday to reopen the giant NUMMI plant in Fremont and jointly work on developing electric cars. As part of the deal, Toyota will invest $50 million in Tesla of the Silicon Valley town of San Carlos.
The NUMMI plant, officially known as the New United Motor Manufacturing facility, was formerly operated by Toyota and General Motors. Tesla has agreed to buy it. No financial terms were released
The news spells double-cross to Downey. “Today the Southeast Los Angeles County region was betrayed by Tesla,” said Downey Councilmember Mario Guerra. “Mr. (Elon) Musk (Tesla CEO) gave me his word that Tesla would be coming to Downey.”
Instead, in the U.S., money talks. Tesla said it began negotiating with Toyota in this spring.
Tesla plans to manufacture its Model S sedan at the facility, a four-door electric that will start at $49,900.
Leave a Comment » | news | Tagged: Downey, Electric Cars, Model S, NUMMI Plant, Tesla Motors, Toyota | Permalink
Posted by Mark Boslet
Electric Car Battery Prices Fall Sharply
May 6, 2010The prices of lithium ion batteries for electric cars are falling rapidly, but perhaps not as rapidly as some observers believe.
A news report in the Times of London claimed Nissan was able to put a lithium battery in its electric Leaf for $8,600, or at a remarkably low $375 a kWh. If so, this would suggest electric cars well below the $30,000 sticker, since batteries are among the most expensive components in the vehicles.
But according to several electric car executives, battery prices haven’t hit such a rock bottom so soon. “We’re seeing significant reductions in the cost of batteries and it’s accelerating,” says Marques McCammon, chief marketing officer at the electric carmaker Aptera. “The cost of batteries is coming down rapidly.”
“We’re seeing significant reductions in the cost of batteries and it’s accelerating,” says Marques McCammon, chief marketing officer at the electric carmaker Aptera.
But to $375 a kWh? Not exactly.
Today batteries are selling to $1,000 to $1,200 a kWH, says Dan Mosher, chief financial officer at CODA Automotive. In eight years, the prices will be dramatically different. But not yet.
That’s because manufacturers assume a steady 5 percent to 10 percent price decline a year for the next five to 10 years, he said. “The race is on.”
The race he refers to is one for capacity. Industry experts now see a sharp increase in production capacity coming online between 2014 and 2017, especially in Japan and the U.S. This increase will push prices lower as producers compete for sales.
Along with the lower prices will come higher capacities, adds Marc Tarpenning, a co-founder of Tesla Motors who has left the company. The capacity, or energy density, of a lithium ion battery is now double what it was in 2003 and the price is similar. “It is hard to imagine that won’t continue,” he said at Electric Car 2.0, the Berkeley-Stanford Cleantech Conference held in San Francisco on Wednesday.
The recent report of a collapse in battery prices is not the first to sweep the industry. Late last year, a General Motors executive let slip lithium ion prices could reach $500 a kWh by mid 2011. Competitors dismissed it as more hope than reality.
Still, the prospect is exciting. Clearly, battery prices are coming down and it is not unreasonable to assume projections are conservative. With lower prices will come more affordable electric cars and rising consumer interest.
As sales climb, production volumes increase and prices fall all the more – a cycle that could work in everyone’s favor except the battery maker.
2 Comments | news | Tagged: Aptera, Clean Tech, CODA Automotive, Electric Cars, Lithium Oil Batteries, Tesla Motors | Permalink
Posted by Mark Boslet
Clean Tech IPOs Have Much To Prove, Says Top VC
April 26, 2010Clean-tech IPOs have yet to prove themselves.
Sure, investor excitement is on the rise with Tesla Motors, Solyndra, Amyris and Ameresco preparing to sell shares to the public. Another potential blockbuster, Silver Spring Networks, is said to have chosen its investment bankers.
It appears the market for clean-tech IPOs is thawing, says Erik Straser, a venture capitalist at Mohr Davidow Ventures
But the track record of recent green IPOs is anything but encouraging. Lithium battery maker A123 Systems went public in September and its shares trade below their introductory price.
Sensata Technologies Holding, a sensor maker from the Netherlands, is hanging onto a gain over its initial price in March, but only a modest one. Biofuel maker Codexis, which debuted its shares last week, is suffering the same fate. And the fortunes of Jinko Solar Holding of China are worse. It canceled its coming out altogether.
“The clean-tech IPOs at this stage are still proving themselves,” says Erik Straser, a partner at the venture firm Mohr Davidow Ventures and leader of its cleantech investment team. Nevertheless, “it appears the markets today are thawing.”
Straser says it is likely there will be more clean-tech IPO filings this year and even a period when less mature companies will go public. That’s because the criteria for what a company needs to interest investors is unsettled.
Several years ago, a high-tech company might need $100 million in annual revenue and profits to attract investors. Clean-tech companies appear to have more latitude. Revenue can be in the neighborhood of $50 million, Straser said in an interview, and business models vary.
Some companies have high production costs and are working them down. Others have businesses that are more future than present. Silicon Valley electric car manufacturer Tesla is an example.
The company sells its Roadster sports car today, but IPO investors will bet on the success of the less expensive Model S sedan, he says. What the Roadster did is show there is a high-end market for high-end electric cars, says Straser, who has invested in green-tech firms such as ZeaChem, Nanosolar and OPX Biotechnologies.
Still, it is hard to predict how clean-tech IPOs will do this year. What is clear is that at some point, investors will become more discriminating and look for more mature companies rather than trendy ones, says Straser. When will this occur? No one knows.
1 Comment | news | Tagged: A123, Amyris, Biofuels, Clean Tech, Codexis, Electric Cars, IPOs, Sensata, Solar Energy, Solyndra, Start-ups, Tesla Motors, venture capital | Permalink
Posted by Mark Boslet
Tesla CEO Musk Gets Big Stock Options Payday For Model S Sedan
April 5, 2010The Model S sedan is a “must” for upstart Silicon Valley carmaker Tesla Motors.
The designer of the Roadster luxury sports coupe will tone down its lineup with the 2012 introduction of the $49,900 Model S, putting its high-end electric cars within reach of buyers who can’t shell out $101,500 for the Roadster.
The new car also is a bonanza for Tesla CEO Elon Musk. The San Carlos company awarded its top exec 20,135,920 million stock options in December, tying half of them to milestones in the development and delivery of Tesla’s all-important second vehicle. The grants equal about 8 percent of the company.
Tesla CEO Elon Musk will earn more than 20 million stock options with half tied to engineering and production milestones for the electric Model S sedan.
In January, Telsa filed with the Securities and Exchange Commission to offer its stock to the public for the first time. In a revised IPO filing last week, the company updated its paperwork, announcing Musk’s options grants and admitting that it lost more money last year than previously disclosed.
According to the filing, the options are valued at $2.21 each, or $44.5 million.
Musk will get his options in two grants. In the first, 10,067,960 options are to be awarded monthly over the next three years, with 2.6 million granted last December. The three-year period corresponds with the development of the Model S. The other half of the options grant Musk will earn as the new car meets certain milestones: 25 percent when the engineering of the Model S is completed; 25 percent when a prototype is finished; 25 percent when production begins; and 25 percent when the 10,000th Model S rolls off the assembly line.
The SEC filing goes on to report that Tesla lost $55.7 million last year, less than the $82.8 million it lost in 2008. This brings to $260.7 million the company’s accumulated losses. Tesla had previously disclosed 2009 loses of $31.5 million through September.
Also included in the document is a response to the Toyota Prius recall. Tesla says it implemented several algorithms in its vehicle software to reduce the likelihood of unintended acceleration due to a mechanical or electronic failure.
“We stop the flow of electricity to our motor when either the car is placed in neutral or the key is rotated from the ‘on’ position. We also stop the flow of electricity to the motor during normal vehicle operation when the brake pedal is depressed for more than two seconds,” the company says.
2 Comments | news | Tagged: Clean Tech, Electric Cars, Elon Musk, Model S, roadster, Tesla Motors | Permalink
Posted by Mark Boslet
