Tesla Motors, apparently unaffected by rumors of CEO Elon Musk‘s money woes, has announced it’s set terms for its IPO at $185 million–through a public share deal and private purchase by Toyota. Tesla’s predicted to make losses until 2012.
At IPO Tesla will sell 11.1 million shares for between $14 and $16 per share. This will bring in around $185 million in cash, and then after IPO Toyota’s May-announced investment will add another $50 million to this–totaling some $235 million of fresh money. This is up significantly from the $100 million Tesla had originally listed in its first stock-registration filing at the SEC in January, and indicates that both the company and its potential investors have confidence in the salability of its electric cars.
Right now that product inventory is a single, solitary car, the Tesla Roadster. This high-end electric sports car has garnered reams of media attention (including being the most expensive gift ever offered on the U.S. Price is Right show) but as of March 2010 only around 1,000 of the vehicles seem to have been produced for sale. The deal with Toyota is part of a plan to co-produce an electric sedan, the Model S, aimed at a more mass market audience, which is where the real long-term income for Tesla is likely to be found. Until this vehicle hits the stores in 2012, however, Tesla is expected to bleed money every quarter. So far its net loss has reached $290.2 million since the company’s inception in 2003, but a $465 million loan from the DoE for the Model S will offset some of this.
Essentially Tesla’s operating on a promise: The green credentials of a wholly electric car, be it limited-edition sports vehicle (which at least catapults EVs into the limelight, turning the public on to the idea) or a mass-market sedan, are so promising that Tesla’s backers must have calculated the long-term benefits to be excellent. When the business is running efficiently, it’ll then have to generate enough income to pay off its loan and return a profit to its investors before it can be truly hailed a success.