Tesla: Invest in your EV future

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Are you a risk-taker, willing to put a bet on a highly speculative, but potentially lucrative investment? Got $5,000 burning a hole in your pocket? Then Tesla Motors has a deal for you.

For the last six weeks, the San Carlos, Calif., electric automaker has been taking deposits on its Model S, a new sedan it unveiled in March. It’s something of an IPO for the alternative-energy-minded, and as such, has been very warmly received indeed.

As of today, more than 1,000 people have plunked down their five large for the right to buy the Model S, the company said Tuesday. That’s an average of more than 20 new depositors a day, and $5 million in deposits. In exchange for that commitment, they get a chance to be near the top of the list to buy the car — which Tesla says will cost $57,490 — along with all the bragging rights of owning an electric car, when it comes out.

And that’s the big question: the one that makes plunking down $5,000 on it a speculative move at best. When will the Model S really come out — if ever?

When Tesla, which currently sells the $109,000 electric Roadster, unveiled the prototype for the slick looking new sedan, Chief Executive Elon Musk said it would start delivering the production model in late 2011.

‘People who drive Teslas refuse to compromise on value, performance or efficiency,’ Musk said.

But there are a number of ‘ifs’ that line the road between here and there.

First and foremost, Tesla needs money. A lot of money. The privately held automaker has had to rely heavily on the deep pockets of Musk, who struck it rich as a co-founder of PayPal. In November, Tesla closed a $40-million round of fundraising after it failed to raise $100 million.

Instead, it’s applying for up to $550 million in loans through two separate federal programs. That money would be used to build a $250-million factory in Southern California to produce the Model S, the exact location of which has not been revealed. The rest of the money would go to development and production of the vehicle itself.

But neither loan has been granted yet — although Musk has been quoted as saying he’s ‘99%’ sure at least one of them will be granted. Still, for the bigger loan, Tesla is competing with companies such as Ford Motor Co. and dozens of other smaller transportation interests, and it’s still uncertain who will get funded.

Without that money, producing the vehicle will be tough. Musk himself acknowledged in January that the company has been losing money on every Roadster it sells; at one time the model cost about $140,000 to build. The company says it has reduced production costs significantly and at the same time has raised prices, with a fully-loaded Sport version starting at $129,500.

And raising more money in the private sector looks even tougher. Tesla raked in $185 million in venture capital, but that well appears to have gone dry.

On top of Tesla’s money questions are competition issues. Tesla was way out ahead in delivering the Roadster. A year after the first keys were handed over, not a single other automaker has produced an electric car.

But now everybody and their mother has an electric vehicle program, and quite a few competitors are likely to be on the market by the time Tesla expects to bring the Model S to market, including the Chevy Volt, an electric Ford Focus sedan and a plug-in hybrid luxury sedan made by Fisker Automotive in Irvine.

Those other models are likely to find buyers among early adopters, and many could come in with lower price points than the Model S. Nissan, for example, says it expects a small electric SUV in 2012 that will cost less than $33,000.

Still, there’s wide consensus that Tesla has developed an attractive and exciting vehicle in the Model S, and the EV enthusiast world is buzzing about it. Putting down a deposit guarantees an early chance at the vehicle, which could be important considering the fact that the waiting list for the Roadster was well more than a year long at one point.

And Tesla is offering a second investment pathway: for a $40,000 deposit, you get a chance to buy one of the first Model S sedans produced, which the company says increases its collector value.

The prospectus can be found at www.teslamotors.com. The company, by the way, says the $5,000 deposit is fully refundable.

— Ken Bensinger

Updated, 12:55 p.m. May 13: An earlier version of this post said Tesla was unable to close its most recent found of fundraising. In fact, the company did close a $40-million round in November after an attempt to raise $100 million failed. In addition, although CEO Elon Musk acknowledged that the Tesla Roadster did at one time cost $140,000 to build, the production costs have since declined. Tesla says it expects to make a profit on each car starting this summer.

Top photo: Tesla Model S