Tesla’s electric cars plug into power partner Toyota
US electric carmaker Tesla Motors is firing on all cylinders and gearing up for greater things after partnering with top carmaker Toyota, before it goes public at some point down the road.business Updated: May 23, 2010 15:29 IST
US electric carmaker Tesla Motors is firing on all cylinders and gearing up for greater things after partnering with top carmaker Toyota, before it goes public at some point down the road.
Tesla, with just a few hundred employees, and Toyota late Thursday announced a 50-million-dollar stake by the Japanese carmaker in the small, Palo Alto, California-based firm.
"The announcement is path breaking and historic," said University of California, Berkley professor Harley Shaiken. "It gives Tesla considerable credibility."
"Toyota is very conservative," he added, so the announcement is good "for investors and Tesla: they can take that to the bank."
Toyota's investment in Tesla follows Germany luxury carmaker Daimler's stake a year ago of "more than five percent" in the electric carmaker; a 465-million-dollar loan from the US Department of Energy, and a 31-million-dollar tax break from the state of California.
Flush with cash, Tesla on Thursday announced it bought a closed, Toyota-General Motors joint venture factory near San Francisco that up to last month was churning out Toyota Corolla and Tacoma vehicles, with a production potential of 500,000 units per year.
If Tesla can hire the plant's 4,500 former workers, it would "get their experience, and their trouble-shooting capabilities," in addition to Toyota's knowhow in large volume sales, said Shaiken.
The Toyota stake and plant acquisition "makes (Tesla's IPO) more likely and significantly more valuable," he added.
However, Edmunds.com auto industry analyst Michelle Krebs warned that Tesla's eventual move to go public is still uncertain, especially in such an unpredictable stock market that has been falling since the start of the month.
"They need to time (the IPO) right with the market," Krebs said, noting that Tesla is not alone in wanting to go public: General Motors and Chrysler came back from bankruptcy last year and also intend to sell more of their shares on the market.
According to US press reports, Tesla would be the first auto company to go public since Ford did so in 1956.
Founded in 2003 by South African Elon Musk, a co-founder of online payments giant PayPal, Tesla already manufactures the Tesla Roadster, a high-performance sports car that sells for more than 100,000 dollars and gets nearly 250 miles (400 kilometers) on a single charge.
The company also plans to unveil in 2012 a "Model S," five-passenger sedan powered by lithium-ion battery packs capable of between 160 and 300 miles (257 and 482 kilometers) per charge, with an anticipated base price of around 50,000 dollars.
With Toyota, Tesla plans to develop other electric models, hoping to break out of the luxury car trade and into mass production.
In the long term, auto industry experts said, the Tesla-Toyota partnership could rival other carmakers.
General Motors plans to launch the hybrid Volt which runs on batteries but also has a gasoline (petrol) motor in case the batteries lose their charge.
Nissan next year hopes to marked the all-electric Leaf like Tesla's models.
After pioneering hybrid vehicles with the Prius but falling behind in fully electric cars, Toyota will now have access to Tesla's "control system, the electronics that control, cool and manage the battery and the electric flow between the battery and the powertrain," said Edmunds.com "green car" expert John O'Dell.
And that's something Daimler already was after, he noted.
First Published: May 23, 2010 15:27 IST