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Electric car maker Tesla prices IPO at $17 a share

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Tesla Motors Inc., the Silicon Valley-based electric sports-car maker, got a warm welcome from investors in the company’s initial public stock offering late Monday.

Tesla priced its IPO at $17 a share, above the expected range of $14 to $16. The stock will begin trading on Nasdaq on Tuesday under the symbol TSLA.

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The deal marks the first IPO by an American car company since Ford Motor Co. went public in 1956.
Tesla and current shareholders sold a total of 13.3 million shares, raising $226 million. The company sold 11.9 million of the shares, for $202 million, before brokerage underwriting fees.

Earlier Monday, Tesla said it was boosting the size of the deal to 13.3 million shares from its previous estimate of 11.1 million -- a sign that Goldman Sachs, Morgan Stanley and other major brokerages that were marketing the deal were seeing robust demand from investors.

Tesla, based in Palo Alto, was co-founded in 2003 by Elon Musk, who made a fortune after co-founding PayPal Inc. and selling it to EBay Inc. Musk also is the entrepreneur behind private spacecraft-development firm Space Exploration Technologies Corp., or SpaceX, which is based in Hawthorne.

Tesla has yet to turn a profit. The company introduced its first electric car, the $109,000 Roadster, in 2008. It has sold only about 1,100 of the cars worldwide.

The IPO proceeds will fund production of the company’s new vehicle, the Model S sedan, which is expected to sell for about $57,000. A federal tax credit of $7,500 for electric cars would cut the price to just under $50,000. The commercial launch is planned for 2012.

With the stock sale, Toyota Motor plans to make a $50-million investment in Tesla, and the latter expects to build cars at a now-closed Fremont, Calif., factory that Toyota and General Motors had operated.

The company says its planned Model S car would accelerate from zero to 60 miles per hour in just 5.6 seconds, making it among the quickest four-door sedans on the road. It is expected to get 160 to 300 miles on a single charge, depending on the version.

Whether a viable consumer market will develop for the car isn’t clear, but the IPO investors clearly were giving Tesla the benefit of the doubt.

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-- Tom Petruno

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