Telsa Worth $1 Billion?

Tesla's recent sale of an 10% stake to Daimler wasn't valued at an exact amount in the joint press release by the two companies. That is an interesting fact, because in doing so they are hiding the valuation of the company. You'd think it's something they'd want to trumpet.

The only official information about the investment was that it was in the "double digit millions". That would be a number between $10 and $99 million, and sources have it pegged at $50 million. At that price, Tesla's value would be $550 million.However a new report has that valuation working out to be nearly double that amount, to the tune of $1 billion!

Of course we don't know whether this report is accurate or not but it does take into account a number of interesting factors like previous investment and the value of the company's brand name.

On one hand the amount seems to be extremely high; on the other I see it as completely plausible. The automobile business is capital intensive and it requires huge sums of money to develop a vehicle, not to mention build a brand name

For instance. GM's ill-fated EV1 electric car program ended up costing over $1 billion. Tesla has a lot of investment behind it, the Roadster developed and in production. Not to mention the Model S concept and all the development and work that has gone into that vehicle.

The brand name and Daimler's vote of confidence with it's investment also count for a lot as well. Tesla is recognized as the de facto electric car company by millions. The Daimler investment was huge because it signaled that the company viewed Tesla as viable.

I expect to see more Daimler investment in the future, and even a possible 100% buyout if things go well. Who knows what the future holds?