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Famous electric car firm Tesla Motors, which has now delivered over a thousand li-ion powered $100k Roadster sportscars, has had a successful IPO. The company's stock, after a slight initial dip, climbed by 40 per cent during its first day listed on the NASDAQ exchange.

Initially priced at $17, Tesla stock closed at $23.89, bucking the day's trend as the NASDAQ overall fell by nearly four per cent. The market itself was plainly pleased to have some good news to offset the gloom, taking out full-page ads in the Wall Street Journal to "welcome Tesla".

The company has had a chequered history, with early development of the Roadster beset by delays and ballooning costs. That situation led to a bitter boardroom battle between Tesla's main financial backer, colourful PayPal hecamillionaire Elon Musk, and co-founder Martin Eberhard.

Following Eberhard's ousting and seizure of control by Musk, Musk claimed that "almost every major system on the car" had to be changed in order to make a $109k Roadster sale profitable. Early customers were supplied with cars whose transmission could not deliver the promised neck-snapping acceleration, though these were later replaced at the company's expense.

The Musk/Eberhard feud later seemed likely to move into the courts when Eberhard sued the firm, claiming that his reputation had been ruined and his early contributions slighted. The suit was later dropped for no obvious reason, leading observers to speculate that Tesla and Musk had been compelled to reach a financial settlement out of court.

Improving Tesla's cash flow situation proved difficult. At the height of the credit crunch in 2008 a planned $100m financing round failed and Musk was compelled to bail the company out with his own money. Subsequent deals with Daimler and Toyota have removed some of the air of peril hanging around the company: the Department of Energy loan has done even more.

Nonetheless, though Musk has since stated that Tesla would now have a positive cash flow were it engaged only in making Roadsters and supplying power trains to other firms, the company acknowledged in pre-IPO SEC filings that it has never been profitable and has burned through more than $290m so far.

It has also revealed that the Roadster order book has dwindled to 100 after 1,000 deliveries, suggesting that the Roadster alone will never pay back the money spent by Tesla in its early years. Furthermore, the company says that all its cars are liable to lose huge chunks of battery life after a few years' use, a fact that is not yet widely apparent as almost all of them are new as yet. Teslas are also handicapped by the fact that they take hours to recharge, as opposed to the mere minutes it takes to fuel up a normal vehicle.

On the positive side, the cost of electricity required to run a Tesla car is paltry compared to heavily taxed motor fuel and users can benefit from many government subsidies and incentives. It's entirely possible that the Model S will sell well.

If the multihundred-million, mass-sales Model S project proves successful it could well wipe out the bad memories and losses of Tesla's Roadster era: but the company's friends and stockholders might wish that the Roadster had actually managed to contribute funds to its successor as was the original plan, rather than saddling it with debts. ®

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