Tesla May Launch IPO, and Charging Networks Will Help

Tesla Motors, maker of the much-written-about Tesla Roadster, would seem to have a lot going for it as it prepares to launch an IPO. The company is selling all the Roadsters it can build (1,000 at last count) and has more than 1,000 orders for the forthcoming Model S. It got a $465 million loan from the Department of Energy to help build the Model S, and Daimler showed its confidence in Tesla's technology by buying a 10 percent share for a reported $50 million (and putting Tesla battery know-how into the electric Smart). On paper, the company is worth half a billion.

But although Reuters reported back in November that Tesla "is planning to go public soon" and "any day," no such filing has emerged. The Motley Fool reported December 23, however, that Tesla faces a "bumpy road" to an IPO, largely because of "the recharging blues." The issue is the perennial "chicken and egg" hangup for electric cars--no cars without charging, no charging without cars. The Fool also worries that plug-in hybrids will prove more practical, and that battery EVs will be dogged by lengthy 220-volt recharge times. "Using a high-power recharging kit that can be installed in a residential garage, Tesla claims that the Roadster will take roughly four hours to recharge," wrote Eric Jhonsa. "I'm pretty sure that's a little longer than your average stop at a gas station."

Tesla isn't talking about the IPO. "We won't comment on rumor or speculation," said spokesman Ricardo Reyes. It's true that long recharge times are an outstanding issue, but there's growing evidence that EV owners will be able to recharge the cars that will start appearing next year. The Car Charging Group Inc. was launched this month with a relatively small $920,000 investment, and it's already publicly traded.

According to CEO Andy Kinard, Florida-based CCGI will not build its own charging technology, but will distribute chargers built by established player Coulomb. Its business model, which doesn't require much up-front capital, is to sign contracts with businesses, condo associations and municipalities that operate parking lots. The contract spells out revenue sharing between the parties, so parking slots will gain free EV infrastructure and lot managers will get cash from charging. "We're looking at places people won't mind killing an hour or two, like malls," Kinard said.

By the end of 2010, Kinard said CCGI (which has nothing in the ground now) hopes to have 1,000 charging stations in place. It is talking to Nissan, among many other players, about how it can help provide charging to support the coming Leaf battery car.

Kinard points out that the industry is standardizing the J1772 charging hardware, which should make it possible for any EV to charge at any charging station. Through Coulomb's Chargepoint website, customers will be able to locate stations and even tell if they're currently occupied. They can also suggest locations for future charging stations.

Kinard said that the hard part for CCGI will be in the next year, when it negotiates contracts across the country. Once a charger is installed, he said, adding another one as demand rises is very easy. The first EV charger will need a gateway unit to transmit sales data to the web, but subsequent units within 100 feet of the first can piggyback on the connection.

A remaining issue for CCGI and others is the legal prohibition against the resale of electricity. Until that is fully resolved, Coulomb and others will charge for a session as opposed to a set number of kilowatt hours. A month of unlimited charging is $59 from Coulomb.

"Our first order of business is educating consumers and getting them to look past 'range anxiety,' and helping EVs fly off the shelves as quickly as possible," said Kinard. If they do, IPOs for companies like Tesla should be a no-brainer.