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This week Tesla Motors, which produces the all-electric Tesla Roadster and has plans to produce a full line of all-electric cars, raised a cool $226 million through an IPO. There were doubts in the media about whether the IPO, which was the first for a U.S. automaker in 54 years, would actually raise much money, but the rapid rise in the value of the company's shares quickly dispelled those. As of this writing they were trading over $30.
The all-electric Tesla Model S. Courtesy of Tesla Motors.
Why is this important for people not investing in Tesla? It means that at least some segment of the market considers an all-electric car company that hasn't yet made a thin dime of profits a good enough bet to risk their money on. It means the company will have hundreds of millions of dollars to pour into its new Tesla Model S sedan. And it will help Tesla make a down payment on the massive capital expenditures a fledgling car company needs to make to become viable.
And what that all adds up to is that there's a better chance that Tesla could become the Apple of electric cars, showing the auto industry how to produce electric products that are as cool as they are practical. And if an all-electric car company can be successful in the American marketplace, it may inspire existing car makers to offer more electric cars themselves, and finally allow us enjoy our cars without having to worry about the price of gas or the price of cleaning up our polluted bodies of water. Yes I know I'm getting a little ahead of himself, but a car guy can dream can't he?
