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Tesla Shares Fall After Trading Restriction Lifted

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On: Fri, Dec 31, 2010 at 11:53AM | By: Sherry Christiansen

Tesla Shares Fall After Trading Restriction Lifted

The electric car is trying desperately to make a comeback. In some small part, we can thank California-based Tesla Motors. They opened the first electric car manufacturing plant in California and have been rolling their “one at a time” hand-crafted electric roadster that boasts an impressive 0-60 mph in just 3.7. Who says electric cars can’t or don't have muscle?

The roadster has a shocking sticker price of $100,000. For many residents of 90210, it’s not that shocking and orders are backed up. Yet, all the positive reviews and company pride wasn’t enough to stop a tumble on recent release of held-back shares. The price took a 15% nose dive. Those in the know point to a six-month restriction, which prevented shareholders from dumping their stock on the market, as the reason for the slide. Once that restriction was lifted and the flood gates opened, the stock skidded. Once again, the laws of supply and demand were in full effect. Now folks are scratching their head, wondering if Tesla can actually compete with the big boys. It will all come down to the battery.

Tesla is a champion of the lithium-ion type of fuel cell. They opt for thousands of small cylindrical cells packed together to form a battery pack. Other electric car battery makers are adopting the large-format cells, which are the size of magazines and stacked together in bundles. The Leaf uses 192 of this kind of cell for its 24kWh battery pack.

Tesla’s chief executive, Elon Musk, isn’t impressed with the Leaf battery and refers to it as “primitive.” Mr. Musk has a lot riding on the new mainstream Tesla auto, which will be a seven-seater and cost around fifty grand. The intention behind this model is to go head-to-head with the mass-produced vehicles of the same size coming from the big players.

Speaking of big players, Tesla has some powerhouses already in their corner. Panasonic bought a big stake in the company back in November. A smart move for Panasonic, considering they are the leading maker of the batteries that Tesla is using. Toyota also got into the Tesla investment game and hopes to use some of their battery technology for their RAV4.

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