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Tesla Motors Closes $40M Round; Funding to Support Launch of Electric Sportscar

Tesla Motors announced the completion of its $40 million Series C financing led by VantagePoint Venture Partners, one of the largest CleanTech investors in Silicon Valley, and by Elon Musk, founder of Paypal and CEO of SpaceX.

The financing will be used to launch the company’s first product, a high performance electric sportscar, and to support final safety compliance testing and production. The company also announced that Jim Marver, managing partner and co-founder of VantagePoint Venture Partners, will join Tesla's Board of Directors.

Other institutional investors include Draper Fisher Jurveston and JP Morgan Bay Area Equity Fund. Several individuals with strong interest in CleanTech investment also participated, including Sergey Brin, Larry Page, Nick Pritzker (through his investment partnership, Tao LLC), and Jeff Skoll (through his investment company, Capricorn Management LLC).

By leading the technology change from gasoline to electric vehicles, I believe Tesla has the potential to be one of the great car companies of the 21st century. The starting point is a high performance sportscar, but the long term vision is to build cars of all kinds, including low-cost family vehicles. Tesla is one of those rare opportunities to change the world in a positive way and build a valuable company in the process.

—Elon Musk, Chairman of Tesla Motors

Martin Eberhard and Marc Tarpenning founded Tesla Motors in June 2003 to create efficient electric cars for people who love to drive. Tesla Motors creates vehicles that conform to all US safety, environmental and durability standards. Tesla’s cars include modern safety equipment such as airbags, front crumple zones, side impact protection, 2-1/2 mph bumpers. Tesla will sell cars in the US only when they pass the Federal Motor Vehicle Safety Standard (FMVSS).

Tesla says that it will reveal further details of its business and its cars in early July 2006.

The Wrightspeed X1 prototype.

In its short life, Tesla has already spawned a competitor: Wrightspeed. Created by Ian Wright, who worked for Tesla for a short period, Wrightspeed is setting out to build “extreme performance electric supercars.”

Its X1 prototype car uses an AC Propulsion 3-phase AC induction motor and inverter and a lithium-ion battery as the power source. The car accelerates from 0 to 60 mph in about 3 seconds, has a top, electronically limited speed of 112 mph, and a range of about 100 miles in urban use.


Tony chilling

Yes! Hopefully, it will be the fastest production car with great styling.
Chinese partners for production and batteries?


If you can raise $700k then you can buy a 4.5 second 240 hp electric Fetish.

Rafael Seidl

100 mile range with sports-car performance? How often can you deep-discharge the batteries before they die, and what does it cost to replace them? The Achilles' heel of EVs was never the electric motor. It's always been the battery, and Li-Ion units under severe stress generate a lot of heat. This is a safety issue (perhaps manageable) but even more so a life expectancy issue.

Shaun Williams


Kokam offer retail off-the-shelf large capacity Li-Poly batteries which can be discharged at a peak current of 8C and staggering continuous current of 5C. They claim a cycle life of >800 (@ 80% DOD). I've heard they've recently doubled this cycle life in the lab by tweaking cathode chemistry.

I know from my own enquiries that their prices have dropped 25% in 24 months even at current low production rates. Imagine if they had a real market.

These batteries are fully recyclable.

It's ok to be a realist but be accurate, keep up-to-date and ENJOY the ride.


That X1 "prototype" doesn't show much creativity... It's just an Ariel Atom with an electric drivetrain, but slower, and with a lower top speed.

The top speed is too low for a car with the cornering qualities of the Atom, severely limiting for track use which is where it shines.

I suspect the price tag will be far too high as well.

The Anonymous Poster

>>Sergey Brin, Larry Page

Google EV? :-)

Mark A

Interesting, but do we really need another new electric ultra high performance (high dollar) supercar. My initial answer is no. We need new electric commuter (low dollar) commuter cars.

But with that being said, if we can get the ultra rich movie stars,corporate CEO's, or record executives to buy and fund these vehicles, hopefully the lessons learned, and ideas implemented, will trickle over to vehicles that will make more sence and have a greater impact.

But back to the car, I wonder if they will have a nationwide (US) dealer network, with service available? I guess we have to wait until early July to find out.

shaun mann

you guys did notice that the tiny battery pack in the converted ariel atom cost $40,000, right?

it may still be a bit early to get excited about electric vehicles.

as soon as someone can provide a battery pack with four times the energy density as that one for 10% of the price, then we can talk. until then, electric vehicle can only be toys for rich folk and expensive neighborhood vehicles.


Just the thing for urban driving.


Series C? For us Engineer non-financial types...

Agree with Raf, motors aren't really the problem here...


@mark A: I could not more agree with you.

Maybe electric cars will be competitive in 100 years!? Who cares? We need realistic alternatives here and now, which are already available:
- cellulosic ethanol
- coal to liquid
- hydrogen (starting with the Californian Hydrogen Highway.)

Next to the already existing FFV's, the next step will be a car with an enginge,that runs on gasoline, E85 ethanol blend, or hydrogen. Like the recently presented Ford Superchief with modified supercharged V10 enginge.
We don't have to reinvent the whole world for more energy independence.

Go away with those electrice cars, plug-in hybrids and fuel cells. We just don't need them. We should concentrate our funds and intelligence for REALISTIC solutions. This is nothing for day dreamers.

Sid Hoffman

Has anyone here owned a sports car before? Two of the most enjoyable aspects are working the gears and the sound of the engine. Ever hear anyone gush about the sound of a Honda S2000 when it's up in the 7000-9000rpm range? It's pretty awesome and in fact a BIG selling point for that car because of the sound the engine makes. Many Camaro/Corvette owners can listen to a smallblock Chevy V8 and know that is "the sound of power". Electric cars have no shifting and make no sound. That takes away a huge amount from the whole sports car experience.


Mazda has a RX-8 which will run hydrogen or gasoline (and if you think rotary engine gas mileage is bad on gasoline just see how far you can get on hydrogen).

It does NOT make any sense at all to try to design an engine to concurrently run on gasoline, E85 and hydrogen. By doing so you create an engine optimal for no fuel at all (or optimal for the worst fuel). A vehicle specifically designed to take advantage of the higher octane of E85 would be far better than a FFV designed for gas but run on E85. Having the entire country run on E5 or E10 would be a slightly better proposition (useable by all current cars) and obviously removes 5 to 10% of the dependence on oil for transportation.

Speaking of concentrating "funds and intelligence for REALISTIC solutions" you ought to just throw away those hydrogen fantasies as that is even further off than plug in hybrids and electric vehicles. Even after all the technical aspects of transportation, production and storage of hydrogen are taken care of a mass produced fuel cell vehicle will still be more expensive than a mass produced electric vehicle. You think a $40,000 battery pack is expensive? The carbon-kevlar composite tanks designed to hold 10,000psi with a form factor suitable for a car are much more costly.


EDF you are sooooooooooooooo wrong on all your points!
It is because of people like you that this country is addicted to Oil [and Bush].

EVs are THE ONLY true alternative vehicle, and if a sportcar is not the real answer to reduce huge amount of nasty gasses and noise pollution, then as soon as a range of new EVs [non-sportcars] are available on the market the alternative solution will be there in fron of our faces!!!


Harvey D.

Sorry edf: Your improved status quo, would lead to 2 or 3 cellulosic ethanol or liquid coal V-8 or V-10 ICE liquid energy guzzlers at every door. It is not sustainable and is not a REALISTIC solution.

We would run out of breathable air and feed stocks for alternative fuels within a few decades.

A REALISTICE solution would use clean or cleaner sustainable energies such as Hydro, Wind, Sun, Waves etc and limited quantities of alternative fuels to run efficiently designed PHEVs. Eventually, the alternative fuel ICE genset could (as an option) be replaced with a small fuel cell.

As on-board batteries and super-caps become cheaper and more efficient (higher energy storage per weight and volume), the size of the ICE genset or fuel cell could be reduced to the level required to maintain 100 Km/h cruising speed on long journeys.

The vehicles of the future should use more and more electricity and less liquid fuels and produce less GHG.

The electricity production and distribution networks are there already. They could be improved and complemented with Hydro-Wind-Sun-Wave production units as required to meet the increasing loads. They are well known technologies and very doable in realative short time frame.


you are forgetting all those rice burners with a lot of noise and no go. If sound or more exacly noise is the big selling point in sport cars, you can replicate it with speakers.
I for one, prefer cars that are completely quiet, don't have to have 0-60 in 3 sec ( 'couse I will never use it anyway) but need to hold to the road well (so I don't have to loose speed at turns), have a good torque at every rpm, so I don't have to downshift all the time or keep rpm at red point.
When I look at a car I am more interested in torque curve, suspension and weight then horse power because those 3 things make it fun to drive.

Example: I visited smoky moutains last year with my friend, we were driving trough low traffic mountains roads with a lot turns. He had subaru impreza with all those noise making rice equipment. I could easily keep up with him in a stack 90hp vw jetta tdi. I simply didn't have to slow down before turns as much and didn't have to have to downshift 'cause I had all the torque I needed. That kind of driving I call fun.
Drug racing from stop light to stop light is not. But I wasn't raised on nascar or drag racing that are based on horse power but on wrx that is based on torque characteristics.

Rafael Seidl

Shaun -

even if the battery OEM claims 1600 deep charge cycles, no volume carmaker will risk using them. While a racecar will only be used occasionally, a regular car will be driven an average of 30 miles every day.

If the owner is careful and recharges the batteries every night, they may last for many years; Li-Ion aging actually depends on both the absolute time since manufacture and the state of charge, with ~40% optimual for life expectancy. If the owner is lazy and allows the batteries to deep-discharge frequently, they will be dead in 4-5 years at the most. Replacing them would cost a minor fortune.

Since it is almost impossible to tell how a battery pack was used by a previous owner, resale value would be low - if you find any buyers for the car at all. Toyota considered this a risk even for HEV batteries (which are never deep-discharged) and gave customers a generous warranty on the Prius. Doing the same for a PHEV/EV would be a huge liability for any carmaker.

Tony chilling

Disruptive economics will not be allowed!
Just think HOW disruptive to investors, retirement funds and jobs, If, suddenly, overnight, the ultimate battery technology were unleashed.
Companies would crumble, investments turned to wallpaper.It would have terrble conquences.
This is why the Government is funding dead-end tech like hydrogen, or keeping the IC engine in the ICU with bio fuel research.
Very little in Electric storage($30M).
But don't sell, the concept of the EV will go the way of the steam engine for cars in the 1970s. The Ultimate battery can not be made cheap enough.


What if batteries were 20 times better? OK, Check out this link about a new aluminum battery design.


What if batteries were 20 times better? OK, Check out this link about a new aluminum battery design.

tony chilling

Europositron and ESStor are in a race for the longest time for battery development. If you can't bring a product out in 3 to 4 years, it is time to close the doors.
I think Europositron's development chart has been stuck in the same place for 3 or 4 months. Looks like they have run into problems.
For ESStor their problems will be two:
1) The constant high voltage applied to this big cap will cause material migration across the dielectric.This will cause leakage or breakdown.
2) Because the the cap will have a very temperature sensitive dielectric constant, the voltage will vary, at full charge, from say 1700v to 7kv. With 7kv, breakdown would be even more of an issue.
Well, at least, EVs will provide constant ink fodder for the pop science magazines.

Shaun Williams


You would know that all series strung Li battery technology requires an (inexpensive) electronic managment system. Batteries would never be allowed to be abused. Which is exactly how, as your self-derogating points out, hybrids operate today. This data is also easily stored for battery life history.

It also seems to be a mind blocker for the anti-EVers to understand the implications of the fact that 95% of the starter batteries used in ICE vehicles today are RECYCLED. This would certainly be done with precious EV Li batteries, reducing their cost even further.

Another hard-to-swallow fact is that every day I commute, go shopping, pick the kids up from school, go to BBQ's etc etc in a battery electric vehicle which uses ancient 100 year-old lead-acid technology. Yet my car is zippy, safe and quiet even though it's a technological dotard.

Expensive? - Try and buy a new cell phone today that doesn't use this technology.


All I gotta say is he should have invested here

40 mill and the cheaper versions of the TANGO would be out now


keep them EV concept cars coming. eventually, one of them will hit the right price/performance point with picking appropriate technologies and boom, you got a revolution on your hands.
there is a bunch of developments on all fronts going on which could affect EVs. its just that the right money has not met the right combination of technologies yet. or maybe it has but we havent read the press release yet.
there are all those improved cathode polymer batteries coming out of the labs, in-wheel drive systems, improved low-cost ultracaps, practically perfect algorithms embedded in low-cost chips for driving rugged and cheap three-phase induction motors etc. Eventually someone will combine these in near-perfect state of the art EV in competitive price range to ICE cars and sell the concept to the right investor.
Bollore Batscap BlueCar comes pretty close already, i just hope they have a 2nd gen concept in development already.


Just to put a similar thought in here, what would you guys say would happen to battery technology if these emerging EV cars were to find their way into racing series? Don't you think the development of battery technology would be accelerated quite significantly? As unfortunate as it may be, in the automotive world, there seems to be a correlation between how "performance oriented" a technology is and how much effort is put into developing it. Maybe it's time EV technology, and more specifically battery technology, began riding this wave.

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