In the midst of a struggling economy, it always feels good to hear about a company that has managed to carve out some success despite the trying times. It feels even better when that company is a key player in the green technology sector. In this case the company is Tesla Motors [Nasdaq: TSLA], the manufacturer of the groundbreaking Tesla Roadster.
A June IPO (Initial Public Offering) for Tesla managed to raise 200 million dollars in equity financing for the company, the first US automaker to go public in 54 years. The success of their financing push in the midst of the current financial turmoil is an encouraging sign for the electric car market in general, signaling that investors (and hopefully consumers) are ready to move on the technology. In addition since IPO’s in general have lost popularity with investors since the dot com crisis earlier this decade, the relative strength of Tesla’s IPO may be another herald of success.
Of course, the fledgling company may also have a little bit of luck to thank for bolstering its efforts. With current events like the continued turmoil in the Middle East, President Obama’s apparent inability to reduce American presence in Iraq and Afganistan and of course the catastrophic Deepwater Horizon oil spill, gas prices have been on the rise and investors seem to be interested in green companies and technology that will move Americans away from dependency on foreign oil. Those were all factors that helped make the Tesla Motors IPO timely indeed.
The money raised will be invested into the production of a new all-electric sedan dubbed the “Model S” which will be priced in the 50-60k range. It is hoping to grab market share away from industry leaders Mercedes, BMW and Audi to support sales. So far things are looking good: the company has already secured $5000 pre-production deposits from a whopping 2,000 customers and has also obtained a manufacturing facility in northern California from Toyota. The Tesla Roadster, the automaker’s previous offering was a specialty 2 seat sports car and was introduced in 2008 with a price tag of $109,000.