Tesla's electric sedan won't go on sale for years, if ever, but that didn't keep buyers from bidding up Tesla stock 40 percent on its first trading day. CEO Elon Musk stole the hearts of yet another round of investors.
Musk's ability to part people from their money is one of precious few absolutely positive omens for his electric-car company. He's drawn funding from Hollywood celebrities, Silicon Valley tech barons, and, more recently, Toyota and the U.S. Department of Energy.
Yet even after raising half a billion in commitments, not to be confused with money in the bank, Tesla faces formidable obstacles. Building a working new car platform, as opposed to just a prototype, can easily cost billions rather than hundreds of millions of dollars and several years. But Tesla claims it will start selling its Model S by 2012, even though it's only been shown in one-off prototype form. And Toyota might not be much help; it gave Tesla money to take an old auto plant off its hands but did not, as initially thought, agree to partner with the company on building the car. Meanwhile, Tesla has halted production on the speedy and pricey Roadster, meaning it has no product to sell in the coming years.
Any Tesla investor who has done his due dilligence on company history knows better than to trust the company's rosy predictions. This is the startup, after all, that in 2006 said it was going to bootstrap the Model S with all-too-elusive profits from the Roadster; no mention was made of federal money or an IPO. These days, there's no telling what the future holds for Tesla, given the huge risks baked into its business plan. Investors can only hope Musk's remarkable salesmanship sees the company all the way down the long road to selling actual factory-made electric sedans to actual customers. It's a roll of the dice, but at least one that involved sexy, well-waxed prototypes. Knock yourself out, stock buyers.