It’s no fun knocking Tesla. Having spent my most formative years growing up just South of the Silicon Valley, and as a lifelong resident of the West Coast of the United States, Tesla’s the closest thing I’ve got to a home team in the auto industry. In fact, as I write this,  a Tesla-branded coffee mug, sits due East of my keyboard, a thoughtful housewarming gift from a kind family friend. This unexpected gift, and the frisson around Tesla’s newly-public stock price prove that there’s a lot of excitement around the California upstart. Unfortunately, Tesla is but a small, inexperienced fish swimming in the global shark tank of the auto industry. Now, one of the big sharks, Volkswagen, is beginning to circle for the kill.
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Far be it from us to tell you to take Jim Cramer’s word as gospel… but he does seem to have Tesla’s IPO figured out. And now that the stock is public (NASDAQ: TSLA), he wants you to run away screaming. We find it difficult to disagree… but feel free to keep an eye on the stock yourself.

A source tells Reuters [UPDATE: Tesla confirms in press release] that Tesla has

sold 13.3 million shares for $17 each, raising about $226 million. It raised the number of shares it hoped to sell by 20 percent. It had planned to sell 11.1 million shares for $14 to $16 each.

That’s more than the “as much as $213m” number floated earlier, but with a recent Toyota deal and an EV-infrastructure bill in congress, Tesla has as much wind at its back as it can ask for. But if investors do get to start trading Tesla stock starting tomorrow, they’ll have a gut check before long. Tesla lost $30m last quarter, and it the second quarter ends on Wednesday. If those numbers show another healthy loss, investors will look away knowing that they’re in a risky, long-term investment. But can a $1.6b market-cap firm really compete in development, design and manufacturing with the giants of the automotive world simply by taking in two times its 2009 revenue in one IPO?

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Accelerating up the motorway slip road, the Ampera charges hard and deceptively quickly up to 50mph, but by then the single-speed electric motor’s flat torque curve has begun a nose dive and acceleration at high speeds is poor.

The 0-62mph time of 9 seconds and top speed of 100mph are an indication of this – most family hatchbacks with that sort of sprint capability will have a top speed of nearer 130mph

The Telegraph‘s Andrew English lays into the Chevy Volt/Opel Ampera’s high-speed acceleration, in an early test drive on European roads. Apparently an Opel engineer was embarassed enough by the performance to tell English that

We are considering driving the wheels directly from the petrol engine

Huh?

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Pity the automotive industry. With a minimum three-year lead time for new product development, timing vehicle launches to coincide with appropriate fuel price levels is never easy. Chevy’s Volt, for example, was developed and hyped during the gas price spike of 2008 when it seemed almost anyone would pay a hefty premium to ease some of the pinch at the pump. Now though, with gas prices holding steady at around $3, there’s reason to question whether consumers will flock to unproven, expensive vehicles like the Volt, absent a pressing economic incentive to reduce gas consumption. The Freep takes on this topic today, asking with gas prices so low, will anyone buy a Volt? And this is not mere media hype. Bob Lutz fretted about this possibility last year, when he said

If gasoline stays cheap, then the American public says, “I’m not interested in that; I will keep my Tahoe longer.” It puts us in the industry in a position where we are at war with the customer

This would be a depressingly familiar position for GM to find itself in, especially since it would be a product of The General striving to do something different. Gas prices are slowly beginning to go up again, but there’s no sign that this summer will see the kind of energy price volatility that will have the Volt and Cruze (let alone the Nissan Leaf) flying off dealer lots. Do you see gas prices going up soon? How expensive will gas need to be before Americans see cars like the Volt as a mainstream option? What happens to the Volt if gas prices stay level, or even drop? No only are these intrinsically interesting questions, but there’s also lots of money (including lots of taxpayer money) riding on the outcome. What say you?

The simplification of the automobile that’s set to take place with the transition to electric drivetrains is a troubling trend for the industry. As Bertel Schmitt has already explored, switching to electric drive could see component counts cut by as much as 90 percent, meaning the suppliers who build most of the components in modern cars are staring down a steep drop in their business. As Automotive News [sub] reports, even electric motors, which were once thought of as a growth area for suppliers looking to get in on the EV shift, are being largely built by OEMs, freezing suppliers out of potential growth. Toyota, Nissan and GM supply their own electric motors, leaving suppliers like Remy International behind in the dust. So how can suppliers stay competitive as EVs become more popular? Counter-intuitively, the answer may be gas-powered range extenders.

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After one year of ownership we would expect EV residual values to be above the segment average expressed in terms of pound values. But, if the battery is owned rather than leased, and lacks the appropriate extended warranty, the value of the typical EV will then fall dramatically until the vehicle is five years old, at which point the car will have a trade value little more than 10 per cent of the list price

So says Andy Carroll, managing director of the British car-buying bible, Glass’s Guide. He tells BusinessCar that Nissan and other firms launching EVs in Britain should take out the battery cost and lease it to customers with minimum monthly performance clauses. This, he says, would dispel concerns, drive sales, and transform the resale picture. It’s also what Project Better Place is doing, albeit in a complete regional package with battery-swap stations and charging infrastructure.

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We won’t be nationwide by end of 2011. By that time we expect to be shipping vehicles to Canada, Europe and several markets beyond those we’ve already announced.

[The nationwide launch date is] all still work in progress and will clearly be dependent on the ability of the production facility to ramp up as planned and all those kind of things. I’m not in a position to tell you by X-date we will be nationwide. I will tell you we’re heading towards national distribution and theres no question about it

Volt Communications Manager Rob Peterson (first quote) and GM Director of Volt Marketing Tony DiSalle (second quote) tell gm-volt.com that the previous 2011 date for the nationwide rollout of the Chevy Volt isn’t going to happen. Meanwhile, if you’re in California, Michigan or Washington DC, your Volt should arrive by 2011. Be sure to tip your congressional representatives, folks! Luckily, though, this video proves that the Volt will be more than up to the challenge of eating the Nissan Leaf’s dust.

Oh, one other thing, I think its maybe helpful to say what has been my track record in value creation – these are four of the companies Ive been associated with – its worth noting that every financing round in every company has been an up round, doesn’t matter if the market has gone up or the market has gone down, the squiggly line is the market, and the valuations are as you can see somewhat market independent, and I expect that to be the same for Tesla, or to continue to be the same with Tesla

Tesla CEO Elon Musk, in his IPO presentation [via Darryl Siry]. This, apparently, is the answer to the question how does a company that’s sold just over 1,000 cars think it’s going to become an industry player?

Good to know.

Possibly not, says the National Federation For the Blind. According to the NYT the group is

disappointed that the [Nissan Leaf’s] driver is permitted to turn off the sound because it in effect, allows drivers to deactivate this important safety feature and thereby endanger pedestrians, especially those who are blind.

Interestingly, Tesla’s IPO presentation opens with a customer describing the contrast between Corvettes “making all that noise” and Teslas which allow the driver to “hear the birds and the ocean.” With the Motor Vehicle Safety Act likely to mandate NHTSA rules on EV safety noises, expect that marketing angle to go the way of the PeaPod…

People really viewed the Peapod as an incredible case study in how you could – in modern times – bring forward a completely new idea in the automotive sector in the space of just several months. It was pretty phenomenal

Remember the PeaPod? It was “the new wave car for the younger set” masterminded by former Chrysler “Chief Innovation Officer” Peter Arnell, during the chaotic “try anything” years of Cerberus ownership. It was supposed to start going on sale last October, but the division (formerly known as GEM) was spun out of new Chrysler during bankruptcy and hasn’t been heard from since. Surprised?

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Tesla, a firm that its CEO Elon Musk describes as a “technology velociraptor,” has unveiled these first hints at future applications of its Model S sedan platform [via Darryl Siry, Full presentation here]. Far be it from us to call Tesla a dinosaur, but if the sedan costs $50k base, who’s going to buy a commercial van based on the same chassis and technology? Tesla had a chance as long as it remained the Ferrari of the Silicon Valley, but these designs hint at a deep lack of focus behind the scenes.

Japan’s boutique car builder Mitsuoka may be more known for the retro-classic cars depicted above – if Mitsuoka is known at all beyond the realm of Nippon. Now, the folks at Toyama’s most famous car manufacturer can’t help themselves any longer, and must join Japan’s current fad … (Read More…)

Whither the electrified market? According to this slide from a recent Johnson Controls analyst presentation [full PDF here], 2m global units by 2015 seems to be one of the models the industry is working on. And compared to other 2015 estimates, like Pike Research’s 3.1m worldwide number, it’s a fairly conservative approach. Still, there’s a long road ahead for plug-in and even hybrid vehicles. Toyota’s Prius, by far the best selling hybrid nameplate in America, sold about 152k units in the last 12 months. All hybrid nameplates sold 27,800 units last month [per Edmunds], for an annualized rate (non-SAAR) of about 333,600 or about half of the estimated 2015 market. Why that’s a problem, after the jump…

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Now here is the perfect place for  electric vehicles: Hong Kong. Range anxiety? Not here.  Hong Kong is a city where no trip is more than 20 miles or so one way. Driving into the hinterlands is blocked by a border and by the necessity for secondary mainland Chinese license plates. Registration taxes on cars are high, they vary from 35% to over 100%, based on the size and value of the car.  Gasoline prices are high, about half of the price is tax. Fertile grounds for EVs. (Read More…)