Tesla sticker shock?
With highly touted plans for a new electric car in jeopardy, an overseas investor steps in to provide new capital and a much-needed endorsement.
GM? No, Tesla.
Remarkably, the terms of German automaker Daimler AG’s 10-percent stake in Tesla may have also helped the Silicon Valley electric-car start-up inch closer to GM in value.
Daimler’s vague disclosure of its purchase price as “double digit million dollar” means Tesla is valued at a minimum of $100 million.
That would make Tesla, which was founded nearly six years ago, about one-eighth the size of 100-year-old GM.
A world away in Detroit, GM has seen its share price spiral downward to near $1. That the price may fall to near zero if the automaker files for bankruptcy as is widely expected. It would be worth less than 2 cents if GM proceeds with plans to issue a flood of new shares to pay off creditors.
GM was worth around $768 million, making it by far the smallest component in the Dow Jones industrial average judged by market cap.
A bankruptcy judge would also cast doubts on the 2010 launch plans for GM’s Volt plug-in range-extended hybrid while Tesla’s all-electric and pricey Roadster is already on the road.
Tesla chief executive, financial backer and tech entrepreneur Elon Musk and GM executives have traded barbs in the past.
GM’s flamboyant former product chief Bob Lutz has described San Carlos, California-based Tesla as a “little West Coast outfit” that was stitching together laptop batteries together.
Musk, meanwhile, has shot back that GM’s range-extender technology in its still-in-development Volt was “neither fish nor fowl.”
Late last year, Musk, who also founded PayPal, couldn’t resist a dig when asked why GM, an early proponent of electric car technology, had not bought his company. “I’m not sure they can afford Tesla right now,” Musk said.