Subject: Tesla beckons to the true believers
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Sun, 23 May 2010 17:46:23 -0400

May 21, 2010, 3:09 p.m. EDT
Tesla beckons to the true believersCommentary: Toyota deal, IPO talk
mobilizes optimists and opportunists

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. (NYSE:TM) 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.<http://www.marketwatch.com/story/tesla-reportedly-teaming-up-with-toyota-2010-05-20>
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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.<http://www.marketwatch.com/story/toyota-investment-adds-jolt-to-tesla-ipo-2010-05-21>

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 <[email-masked]>
-- 
Eric D. Schwerin
Rosemont Seneca Partners
(202) 333-1880
[email-masked]