Tesla beckons to the true believers Commentary: Toyota deal, IPO talk mobilizes optimists and opportunists

Posted by Ahmed on 3:43 PM

By MarketWatch
SAN FRANCISCO (MarketWatch) -- Tesla Motors, the Silicon Valley maker of electric cars whose hot-rod Roadster has tickled the fancy of every well-heeled geek on the road, plans to go public. Someday.
It's certainly making all the right prelaunch moves.
Late Thursday, Tesla announced it's teaming up with industry heavyweight Toyota Motor Corp. /quotes/comstock/13*!tm/quotes/nls/tm (TM 75.59, +1.59, +2.15%) The deal includes a helpful $50 million cash injection from Toyota and gives Tesla the automotive clout critics have long claimed it lacks. Read more about Tesla teaming up with Toyota.

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It also buys lots of local goodwill. The Tesla-Toyota team plans to reopen the old GM-Toyota plant in Fremont, right across San Francisco Bay from its headquarters, and hire about 1,000 workers -- laying the groundwork for what many hope will be the high-tech rebirth of the American auto industry.
All this news is getting a giddy reaction from an unusual alliance of environmentalists, car buffs and techies, all practically begging to be part of this new venture. They'll likely get their chance. Tesla applied to launch an initial public offering back in January; the company just hasn't set a date for when it will be. Read about Tesla's planned IPO.
Meanwhile, for cool-headed capitalists, Tesla's planned IPO is hardly a slam dunk. While there's plenty to love about the Tesla-Toyota partnership, it doesn't answer many of the vexing questions that have dogged the electric-car business for decades.
Are the cars reliable? What's their driving range? Do they require a network of recharging stations to keep them on the road? And do they offer the kind of basic, bottom-line transportation value needed to attract mainstream buyers in a tough market?

While there's plenty to love about the Tesla-Toyota deal, it doesn't answer many of the questions that dog the electric-car business.
What's more, the venture faces all sorts of problematic manufacturing and labor issues. Less than a day after the announcement, the United Auto Workers insisted Tesla-Toyota hire workers recently laid off at the old GM-Toyota plant.
Silicon Valley, meet Detroit. Talk about a mind-numbing culture clash.
Despite the pitfalls and the distinct possibility of failure, it's refreshing to see that a little of the old gold-rush mentality has survived these glum economic times, and that there are still people eager to jump on something innovative and untested.
American entrepreneurs aren't dead. They just need the right mix of incentives and imagination to lure them out of hiding.
-- Jim Jelter