The TSLA stock zoomed out of the gate, but is Tesla itself going to stay afloat? Image from Flickr.

This morning, the tech-heavy Nasdaq stock exchange added TSLA. Tesla Motors, a seven-year old electric car company, launched its IPO this morning. The stock opened and is trading above expectations, but will it be enough to keep the company afloat?

TSLA launches IPO

Based in Palo Alto, Calif., Tesla Motors launched its initial public offering on Nasdaq today with a $17-per-share price. Already today, more than 13 million shares have been sold. Original estimates put opening bids for TSLA stock at between $11 and $13 per share.

IPO helps Tesla get money now

Tesla Motors is a company, founded in 2003 that is focused on making high-end electric vehicles. TSLA has released a few vehicles, but the price has been of concern. The company has never been profitable — it lost more than $200 million just last year. In order to continue development on the planned sub-$50,000 electric sedan, Tesla needed cash quick. With the IPO of TSLA, Toyota Motors invested $50 million in the company. The U.S. Government has also given Tesla a $465 million easy cash loan.

Growing competition in the electric car market

When Tesla Motors was first founded, the competition in the electric car market was mostly theoretical. Tesla Motors has garnered some very high-profile support with its $109,000 electric roadster — but the company needs a mass-market vehicle to be financially solvent. While they are hoping that the Tesla Model S will clock in at about $50,000 after tax credits, it will not be the only affordable electric vehicle. The Nissan Leaf gets one-third the expected range of the Model S, at only 100 miles. At half the price of the Model S, though, Nissan is already selling out pre-orders. The Chevy Volt is an electric car that has a gasoline back-up and is expected to go for about $25,000.

TSLA stock expectations

With a high stock price at the IPO and high expectations of performance, some investors are drooling over Tesla’s stock (as well as its cars). The company has made great strides for electric vehicles in the past seven years, but as an investor, it might be important to sit back and take a close look at the company. Growing competition and high start-up costs, as well as a niche market vehicle, mean that TSLA may be facing an uphill battle to profitability.

Tesla Motors cars aren't powered by a Tesla coil, but the late physicist would probably love them anyway. Image from Wikimedia Commons.

It was announced last week that Toyota would be purchasing a large stake in Tesla Motors, the electric car manufacturing firm. Tesla specializes in high-end, all-electric roadsters, including an electric sports car capable of doing more than 100 miles per hour.  Its flagship model, the Tesla Roadster, is capable of going from 0 to 60 in less than four seconds, which is a considerable feat for any car.  The company had experienced lagging revenues, and the deal was announced ahead of an Initial Public Offering to boost revenue.

The Toyota Tesla deal

Toyota is already one of the leaders in the field of hybrid cars, as the Toyota Prius retains the top spot for hybrid sales. Boutique electric car company Tesla Motors announced an IPO was forthcoming as it needed to raise capital, and Toyota has thus far pledged $50 million. According to the New York Times, Tesla Motors had suffered losses of more than $56 million in 2009, and it filed for an Initial Public Offering of stock to boost capital.  The Tesla Roadster starts at about $109,000, so auto loans for the car are considerable.

The flagship Tesla Roadster

The claim to fame for Tesla Motors is the Tesla Roadster, the fastest production electric or hybrid car.  The basic model is capable of going from 0 to 60 miles per hour in 3.9 seconds. The slightly faster Tesla Roadster Sport is capable of the 0 to 60 miles per hour feat in 3.7 seconds, but costs about $20,000 more.  Granted, that is not exactly a time for the record books, but it is as far as hybrid and electric cars are concerned.  (For the record, the fastest domestic stock production car from a major manufacturer is the Chevrolet Corvette ZR1.)

This is good

This is an excellent move for Toyota, and for Tesla.  Tesla is a green manufacturer, already producing an eco-friendly sports car, and soon the company will start manufacturing the Tesla Model S, a family sedan that will retail for less than $60,000.  Part of the Toyota venture is allowing the Model S will be manufactured at the NUMMI manufacturing facility, which was recently closed.  It appears a Tesla of any sort creates sparks wherever it goes.

Not an image of the Palo Alto crash. (Photo from Wikimedia Commons)

A small plane, a Cessna 310, descended out of the sky around 7:55 am in Palo Alto, California, slamming into a residence and bursting into flames.  According to the Associated Press, all three aboard the small plane died in the crash, and all fires were extinguished quickly, with no other injuries or fatalities having been reported.  The identities of the people aboard the plane are still the subject of speculation; power outages that began shortly thereafter are believed to have been a result of this tragedy.

Great skill or luck

According to the same Associated Press release, the plane broke apart by possibly striking a power pole and power lines.  The city operates on a municipal power grid, which is believed to have been damaged by the crash.  Most of the city of Palo Alto lost power soon after.  Area hospitals had to switch to a back up generator power.   The plane was registered to Air Unique, Inc. and was headed to the Hawthorne Municipal Airport.

Passengers rumored to be Tesla Motors execs

According to Reuters, the company the plane was registered to was registered to Tesla Motors senior engineer Doug Bourn.  Tesla Motors is one of the highest profile independent electric car companies, and their Tesla Roadster is a high performance electric car, capable of doing over 100 mph.  The CEO of Tesla Motors, Elon Musk, was not aboard the plane.  Their identities are likely to be kept private.  Tesla is one of the leaders in the independent electric car companies.

Power outages still ongoing

The power outages in Palo Alto have not been completely resolved, and issues are still being reported as schools, hospitals, and business are still awaiting the restoration of full operation of utility services.  The incident has been a terrible tragedy, and hopefully the families of the deceased may find some measure of peace in this time of grief and turmoil.