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Tesla's Betting the Farm on the Model S, and Other Fun Facts From Its S-1

After reading over electric vehicle startup Tesla’s S-1 filing on Friday, after it filed for an IPO to raise up to $100 million, it’s clear that Tesla has a few things in spades: a stellar brand, lots of losses, and pretty much a single plan to generate profits in the coming years, the Model S. The company has only sold 937 Roadsters (as of the end of 2009), will have a large gap between selling its current generation Roadster (which it won’t sell after 2011) and its next generation Roadster (which won’t be sold at least until 2013) and has no other third-party deals beyond the limited Daimler supply deal.

What Tesla does have in its corner is that its “the first, and currently only, company to commercially produce a federally-compliant highway-capable electric vehicle,” and a $465 million loan from the feds. While Tesla’s IPO might survive on brand recognition alone, the company’s balance sheet looks risky even in comparison to solar thin film firm Solyndra and lithium battery maker A123 Systems. Here’s some fun facts and figures from Tesla’s S-1:

How Many Roadsters Have Been Sold: Tesla says it has sold 937 Tesla Roadsters to customers, as of December 31, 2009.

Losses and Revenues: As of September 30, 2009 Tesla says it has generated $108.2 million in revenues, has a deficit of $236.4 million and lost money every year including $30 million for the year ended December 31, 2006, $78.2 million for the year ended December 31, 2007, $82.8 million for the year ended December 31, 2008, and $31.5 million for the nine months ended September 30, 2009. “We have had net losses in each quarter since our inception. We believe that we will continue to incur operating and net losses until at least the time we begin significant deliveries of the Model S, which is not expected to occur until 2012, or possibly later.”

Model S, Interest and Price: Tesla says it has 2,000 customer reservations (each which have already paid $5,000) for the Tesla Model S, as of December 31, 2009. The base price of the Model S is supposed to be $49,900, including a federal tax credit of $7,500, but Tesla also says that the company has “only recently begun the component procurement process for the Model S, which limits our ability to accurately forecast the cost of the vehicle.” “Final pricing for the Model S will not be known until 2011 at the earliest,” says Tesla. Tesla intends to start “volume production” of the Model S in 2012 with a target yearly production of about 20,000 cars per year.

3-Kinds of Range for Model S: Tesla says it plans to make the Model S available with three types of range – 160 miles, 230 miles, and 300 miles, on a single charge – “to allow customers to purchase an electric vehicle that best matches their personal driving needs.” The 160-mile Model S will cost $49,900, and Tesla has not determined the price of the Model S’s with the higher range.

How Far Along Is Tesla on the Model S?: “We currently have a drivable early prototype of the Model S, but do not have a full production intent prototype, a final design, a manufacturing facility or a manufacturing process.”

Not Selling Current Roadster After 2011 & Next-Gen Roadster Not Until 2013: Tesla will have a big ol’ gap in its Roadster sales. Tesla says: “Prior to the launch of our Model S, we anticipate our automotive sales may decline, potentially significantly as we do not plan to sell our current generation Tesla Roadster after 2011 due to planned tooling changes at a supplier for the Tesla Roadster, and we do not currently plan to begin selling our next generation Tesla Roadster until at least one year after the launch of the Model S, which is not expected to be in production until 2012.”

Future Models Beyond S: Tesla says future models “may include a sport utility vehicle, commercial van or a coupe.”

The Loan: Tesla received a $465 million long-term loan under the United States Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program which will be used to build the Model S plant and an electric powertrain production plant.

Tesla Stores Doubling This Year: Tesla currently has 10 stores operating and plans to “nearly double” that amount by the end of 2010, and a target of approximately 50 stores within the next several years.

Potential Delays of Model S: Given there were so many delays of the Roadster, who knows if the Model S will arrive on time in 2010. Tesla notes in its risk section: “we may experience significant delays in the design, manufacture, launch and financing of the Model S.”

Range on a Single Charge Drops Dramatically: Wow. Really? “We currently expect that our battery pack [for the Roadster] will retain approximately 60-65% of its ability to hold its initial charge after approximately 100,000 miles or 7 years, which will result in a decrease to the vehicle’s initial range.” In addition “battery performance, specifically its ability to store electricity over time, is not covered in either the New Vehicle Limited Warranty or the Extended Service Plan.”

Tesla Rangers to the Rescue: Tesla started the Tesla Rangers program in October 2009 to maintain the EV fleet.

Roadster Suppliers: “The Tesla Roadster uses over 2,000 purchased parts which we source from over 150 suppliers, many of whom are currently single source suppliers for these components.” Lots of opportunities for delays ad hiccups.

Risk Factors With the Reservation System: “Regulators could review our practice of taking reservation payments and, if the practice is deemed to violate applicable law, we could be required to pay penalties or refund the reservation payments that we have received for vehicles that are not immediately available for delivery, to stop accepting additional reservation payments, to restructure certain aspects of our reservation program, and potentially to suspend or revoke our licenses to manufacture and sell our vehicles.”

Dependent on Elon: The financing agreement with Daimler contains conditions that Elon Musk has to stay on as CEO before the end of 2010, and at least Chairman of the Board until 2012, or find an agreed-upon replacement, or Daimler can terminate its agreements.

Musk’s Compensation: Musk was compensated $33,280 per year for his role at Tesla — “the minimum wage requirements for executive officers in the State of California . . . Mr. Musk, however, currently only accepts $1 per year for his services,” says Tesla. But it’s not about philanthropy — he got $23.89 million in option awards in 2009, and holds far more shares than anyone other shareholder (put in far more money, too).

Daimler Gets First Look at Acquirors: “The Daimler agreement includes “certain restrictions that decrease the likelihood that potential acquirers would make a bid to acquire us, including giving Blackstar [Daimler] a right of notice on any acquisition proposal we receive for which we determine to engage in further discussions with a potential acquiror or otherwise pursue. Blackstar then has a right, within a specified time period, to submit a competing acquisition proposal.”

Number of Tesla employees: As of December 31, 2009, Tesla had 514 employees.

15 Responses to “Tesla's Betting the Farm on the Model S, and Other Fun Facts From Its S-1”

  1. Blue Swan

    Tesla’s financial behavior is bordering on the criminal. They have failed to meet technological deadlines time and again. They have said they would bring product to market only to be shown to be nowhere near production ready! Their core technology, battery cars, has been shown to be impossible to master even by the world’s biggest car companies. A sports car that takes 8 hours to recharge? And you want to have dealerships everywhere? This whole thing is a bad pathetic joke.

    • Consider looking beyond your nose – or even the borders of East Overshoe, America.

      Battery tech on commuting vehicles – including commercial use – works well enough around the world. The fact of expanding attention is laying the groundwork for a qualitative jump in utilization.

      Cripes. Save me from insular politics.