Toyota and Tesla Motors are going back to the future to update the RAV4 EV, essentially resurrecting an excellent electric vehicle the Japanese company killed seven years ago.

The two companies announced today that they will develop the vehicle with a goal of producing it in 2012, bringing cheers from EV advocates thrilled by the return of a vehicle they adore. It’s a brilliant move for everyone involved. Toyota, which has so far been lukewarm about EVs, gets something on the road quickly and cheaply. And Tesla gets its drivetrain in more vehicles.

“Basically, for a net investment of $8 million, Toyota has gotten itself a ready-made EV program,” said Aaron Bragman, an auto industry analyst for IHS Global Insight. “Toyota is behind the ball when it comes to fully electric vehicles. This is them playing some serious catch-up and doing it for relatively little investment.”

Both companies also  get some good PR when they need it. Toyota’s been hit by yet another round of recalls, and Tesla’s stock price fell below its initial offering price earlier this month. The company’s stock rose almost 4 percent today on the announcement.

The Japanese giant took the Silicon Valley upstart under its wing in May when it gave Tesla the New United Motor Manufacturing factory for $42 million and agreed to buy $50 million in stock when Tesla went public. They said from the start that we’d see an electric vehicle born of the marriage, but neither side is breaking new ground here.

Toyota is essentially updating an electric vehicle it built in limited numbers between 1997 and 2003. The vehicle featured a 27.4-kilowatt-hour nickel-metal hydride battery that recharges in 5 hours at 240 volts. Toyota leased RAV4 EVs to utilities, businesses and cities through 2002 and sold 328 of them to private citizens in 2003. Unlike other automakers (cough GM cough Honda), Toyota didn’t crush the cars at the end of its EV program,  and most are still on the road.

“I’m still getting 120 miles of range,” said Paul Scott, a founder of the advocacy group Plug-In America. He bought his in September 2003. “It still runs exactly the same as the day I bought it. There’s no degradation of the battery, no variation in the performance. It just runs.”

Scott, like other EV advocates, couldn’t be more excited to see the RAV4 EV return. The current generation RAV (pictured above) is roomier and more nicely appointed than the model Toyota electrified 13 years ago (pictured below), and using a lithium-ion battery should boost performance.

“Toyota did a great job with the original, and the new RAV4 will be even better,” he said.

Neither Tesla or Toyota offered any specs for the next-gen EV. But a small electric SUV makes a lot of sense because it provides more practicality than a compact.

“It will have a wider appeal than many EVs that will be on the market,” Bragman said. “This is one of  the things GM is thinking of with a crossover utility vehicle version of the Volt. This is what the next level will be.”

As for Tesla’s role in all of this, Toyota says “prototypes will be made combining the Toyota RAV4 model with a Tesla electric powertrain. Tesla plans to produce and deliver a fleet of prototypes to Toyota for evaluation within this year.” In other words, there’s no guarantee Tesla drivetrains will appear in production models. It’s similar to Tesla’s work with Daimler, which used Tesla batteries in the Smart ForTwo Electric drive prototypes but will use its own packs in production models slated for 2012.

“The RAV4 may be a reality in 2 to 3 years, but only if Toyota puts a lot more than their initial $50 million behind it,” said Mike Omotoso, an analyst with J.D. Power and Associates. “Tesla is not financially self-sufficient and will need more money to build a RAV4 and/or Model S.”

Toyota’s investment in Tesla gives the Japanese company a peek at some excellent technology and helps put Toyota’s EV program on a fast track quickly and cheaply. But to suggest, as many have, that Tesla is Toyota’s electric savior is ludicrous. Toyota dominates the hybrid market, so it clearly knows how how to build batteries and motors that work.

What’s more, the original RAV4 was, and remains, an impressive vehicle. Toyota could slap the original’s electric drivetrain in the current RAV4 and have a competitive EV. That’s a testament to the original’s technology and Toyota’s EV expertise.

UPDATED 4:10 p.m. Eastern.

Photos: Toyota

See Also:

• Toyota, Tesla Burnish Their Images by Teaming Up
• Toyota-Tesla Prototype Expected This Year
• Tesla IPO Raises $226.1M, Stock Surges 41 Percent
• Nissan Leaf Electric Vehicle Is Surprisingly Affordable
• Chevrolet Volt Sure Drives Sweet

Toyota built the RAV4 EV from 1997 until 2003, and most of them are still going strong. The cars are such solid performers and so highly sought after that they would routinely command prices of $40,000 to $50,000 on those rare occasions someone sells one.

Tesla Motors has given the Roadster a makeover and more comfortable seats.

The Silicon Valley company calls the redone ride Roadster 2.5 and says it “reflects Tesla’s commitment to innovation and the company’s close feedback loop with its customers.” The high-tech jargon is no accident. Company CEO Elon Musk makes a point of portraying his company as more closely aligned with the tech sector than the auto industry.

Be that as it may, the redesign shows how closely Tesla hews to the auto industry business model. Refreshing an aging design is common, as is the custom among high-end automakers of offering variations (Tesla Roadster Sport) on long-running models to maintain or renew interest. Lamborghini, for example, does just that with models like the Gallardo.

Not that there’s anything wrong with that, mind you.

Roadster 2.5 is more handsome than the original. It sports a new front fascia — which resembles that of the Model S sedan — with diffusing vents. There’s a new diffuser at the  back. The car rides on forged wheels, and occupants sit in more comfortable seats with better support. Inside, there’s an optional 7-inch display with a back-up camera and more sound dampening.

The car also sports improved power control hardware “that enables spirited driving in exceptionally hot climates,” said spokeswoman Khobi Brooklyn.

“Although development of the Model S is our main focus, this shows that we still care a great deal about improving the Tesla Roadster,” Musk said in a statement. “These improvements are a direct result of customer feedback and come only a year after release of Roadster 2.0, showing an exceptionally rapid pace of innovation.”

Musk says the company will “where feasible” offer current Roadster owners to purchase the upgrades.

The timing of the redesign coincides with the opening of Tesla’s newest retail stores in Copenhagen and Newport Beach, California and the company’s successful initial public stock offering, which raised $226.1 million on Tuesday.

Although Tesla has arranged to increase Roadster production 40 percent, production comes to a close at the end of 2011. Lotus will be retooling its factory in Hethel, England — where the Roadster is built — and Tesla will be focused on building Model S.

Photos: Tesla

The front end gets a new fascia with diffusing vents ahead of the wheels, which are now forged.

The back end got a new diffuser.

Inside there are more comfortable — and supportive — seats, an optional 7-inch touchscreen and better sound deadening.

For the sake of comparison, here’s a shot of the earlier generation Roadster. This one is the Roadster Sport model. Photo: Jim Merithew / Wired.com

Tesla Motors raised $226.1 million dollars in an initial public offering Tuesday, and its shares surged 41 percent as investors snapped up stock in a Silicon Valley company that, for all its buzz, has posted a profit just once.

Shares closed at $23.89 after opening at $17, an impressive gain given that the Nasdaq lost 3.85 percent and the Dow fell 2.65 percent.

Tesla, which is the first American automaker to go public since Ford in 1956, priced its shares above the initial price of $14 to $16. The company, listed on the Nasdaq as TSLA, boosted the number of shares by 2.2 million to 13.3 million late Monday because of high demand.

“It gives them some cash that they desperately need,” John O’Dell, senior editor at Edmunds GreenCarAdvisor.com, told AFP. The company’s initial public offering was a “bit of referendum on the future of the electric car.”

Investors didn’t mind that Tesla has yet to earn money. The company has posted a profit just once — in July 2009 — and lost $25.5 million during the first three months of this year. It lost $55.7 million last year, an improvement over 2008, when it lost $82.8 million. All told, Tesla has burned through more than $300 million since its founding in 2003.

“A lot of people were puzzled about why we were going public without profits,” Musk told reporters outside the Nasdaq building in Times Square. “The reason we are not profitable today is because we are in the midst of expanding with the Model S.”

The burn rate hasn’t kept Tesla from lining up some big supporters. Daimler bought a sizable stake in the firm, and Toyota signed a sweetheart deal with Tesla just last month. Even Uncle Sam got in on the action: The Department of Energy lent the company $465 million to help build the Model S sedan, which Tesla keeps promising we’ll see in 2012.

“Investors that are interested in Tesla know that it’s going to continue to burn cash until it gets Model S into commercial production,” Matt Therian, an analyst at IPO research firm Renaissance Capital, told CNNMoney.com. “Tesla investors are really looking out to 2012, with their investment very much tied to whether they think 20,000 is a conservative or an aggressive number.”

Tesla made its name selling the $109,000 Roadster sports car, but its future depends on broadening its appeal with the Model S. The company plans to produce 20,000 Model S sedans annually. More than 2,200 people have placed deposits for the car, which will cost $49,500 after the $7,500 federal tax credit.

Musk, in an interview with CNBC, said “people need to appreciate that if we were just making the Roadster, we would be profitable as a company but we are in massive expansion mode. We are increasing our volume by 30 to 40 fold, so it is just impossible for a company to be profitable given that level of growth.”

Tesla will build the Model S at the former New United Motor Manufacturing factory in Fremont, California, it bought from Toyota for $42 million.

Despite the big investments from Daimler and Toyota — which will buy $50 million worth of stock — Musk tells Bloomberg, “our goal is to remain independent.” Being acquired by a bigger player isn’t “out of the question,” he says, but “it’s just not something we’re aiming for.”

UPDATED 7:15 p.m. with Tesla’s closing price and more from Musk and analysts.

Photo: Tesla CEO Elon Musk responds to a reporter’s question following the company’s initial public offering Tuesday on Nasdaq.
Mark Lennihan/AP

Tesla Motors honcho Elon Musk loves portraying his Silicon Valley company as everything the Big Three would like to be: Innovative, nimble and oh-so-cool.

During a recent roadshow pimping the initial public offering that raised $226.1 million for the company today, the man who once said “Let me run Detroit” declared Tesla Motors is “closer to an Apple or a Google than a GM or a Ford in the way we operate the company.” It is, he said, lean and nimble and sure to succeed.

“I don’t think that’s something that GM or Ford is going to be able to replicate — ever,” he said.

But as Reuters notes in an exhaustive 4,400-word story, Musk has relied heavily on the very industry he so enjoys taunting. A high-profile investment from Daimler, a sweetheart deal with Toyota and a $465 million federal loan have been absolutely vital to keeping Tesla on the road.

Musk firmly believes the electric vehicle is the future, and if nothing else Tesla Motors deserves credit for showing the technology is viable. Even a guy like Bob Lutz, former vice chairman of General Motors, gives Musk grudging respect for the Roadster. But despite the coming of cars like the Chevrolet Volt and Nissan Leaf, there’s still a lot of skepticism about the cost and viability of EVs in the near term.

And that, as Reuters notes, means investors pondering the first IPO by an American automaker since Ford in 1956 must decide whether Tesla is a high-risk but high return bet on the future or the Silicon Valley version of “Government Motors.”

The Reuters piece covers familiar territory to anyone who’s followed the EV space and it recaps all the entrepreneurs who, like Musk, tried and failed to remake the auto industry, but in the end even Lutz concedes you can’t write Tesla off just yet.

“Tesla may still prove to be the exception,” he said.

Check out the Reuters piece here.

UPDATED 3 p.m. June 29 to include the latest on the IPO.

Photo: Jim Merithew / Wired.com

Elon Musk has hit the road to sell Tesla Motors’ impending IPO to financial types, and the roadshow presentation includes a glimpse of some models that might — might — be coming, including a gorgeous cabriolet.

Musk, clearly nervous, extols the virtues of his company in pitching the initial public offering — which Tesla hopes will raise $178 million — and says it is “closer to an Apple or a Google than a GM or a Ford in the way we operate the company.” It is, he says, lean and nimble and sure to succeed.

“We will prosper and grow rapidly,” Musk promises.

There’s not much new information for anyone who’s followed Tesla, and Musk repeats his promise that we’ll see the Model S sedan in 2012. He says the biggest battery available in the car will offer a range of 300 miles and a DC quick-charge time of 45 minutes. The platform underpinning the car will be used for a cabriolet, a crossover utility and a van, of all things.

“The Model S is a platform,” he says. “We’re designing it to be readily accessible to a wide range of cars, and each one of these cars is going to be freakin’ bad-ass.”

By the time the S is available, Musk says Tesla plans to have a dealership in each of the 50 largest metropolitan markets in the world.

The rendering of the cabriolet is gorgeous, no doubt about it, and Musk outlines an ambitious plan for growing his company. But we’ll wait until the S is built before we get excited about anything that may come after it.

Check out the roadshow here.

Image: Tesla Motors

See Also:

• Tesla Aims for $178M With IPO Planned This Month
• Toyota-Tesla Prototype Expected This Year
• Toyota, Tesla Burnish Their Images by Teaming Up
• Tesla: Model S ‘May Experience Unexpected Delays’
• Share in Tesla Electrifies the Teutons

Tesla Motors goes public on June 29 and hopes to raise $178 million.

The Silicon Valley firm, which has selected “TSLA” as its Nasdaq ticker symbol, hopes to sell 11.1 million shares at $14 to $16 a share, according to a prospectus Tesla released today. At 16 bucks a share, Tesla would have a market cap of $1.46 billion. The impending IPO has drawn its share of buzz, and research firm Renaissance Capital tells the Los Angeles Times it is “highly anticipated.”

Current stockholders, primarily CEO Elon Musk, will sell about 2.2 million shares when Tesla goes public. Musk, however, is barred from cashing out under the terms of Tesla’s $465 million federal loan. The company will reserve 900,000 shares for customers who have received a Roadster, business associates and others.

For all the buzz it can generate, Tesla has posted a profit just once — in July, 2009 — and has lost $25.5 million during the first three months of this year. The company lost $55.7 million last year, an improvement over 2008, when it lost $82.8 million.

Still, Tesla has managed to attract support from some big players. Just last month Toyota promised to buy $50 million in common stock when Tesla goes public, which would give the Japanese automaker a 3.6 percent stake. The two companies also say they will work together on an electric vehicle. Although there has been no official word on when, or if, such a partnership might bear fruit, the two companies reportedly plan to have a prototype ready by year’s end.

The Toyota deal came one year to the day after Daimler bought a big stake in Tesla and said it would use the company’s batteries to jump-start the Smart ForTwo Electric Drive program. Tesla also is providing batteries to Freightliner Custom Chassis for an electric delivery truck. Musk has said his company’s biggest impact would come not by selling cars, but by selling EV drivetrain components.

For its part, Tesla has sold just 1,063 cars (in 22 countries) since the Tesla Roadster started production in 2008. It reported $20.59 million in sales — primarily from the sale of Roadsters and ZEV credits to Honda and others — for the first quarter of this year, essentially the same as the first quarter of 2009.

The company is pinning its future on the Model S, a gorgeous sedan that Musk keeps promising we’ll see in 2012. Some 2,200 people have made refundable deposits of at least $5,000 to reserve an S, which will go for $49,900 after the $7,500 federal EV tax credit. The Toyota deal included the New United Motor Manufacturing factory in Fremont, California, which Tesla bought for $42 million.

Tesla will use proceeds from the IPO, along with a $465 million Department of Energy loan to tool the factory and build the S.

Tesla has a lot to do and not much time to do it if we’re to see the S in 2012. Topping that list is tooling the factory and training the workers. That’s a tall order, and some people within the industry have told us they doubt Tesla will fill it before 2013. But Musk has shown an uncanny ability to pull rabbits out of his hat at just the right moment, so he can’t be counted out.

Photo: Jim Merithew / Wired.com

See Also:

• Tesla Motors CEO Promises More Models Soon
• Toyota-Tesla Prototype Expected This Year
• Toyota, Tesla Burnish Their Images by Teaming Up
• Tesla: Model S ‘May Experience Unexpected Delays’
• Share in Tesla Electrifies the Teutons

We’ll see a prototype of the first electric vehicle to be born of the Toyota-Tesla marriage by the end of the year.

Or not.

Kyodo News, citing unnamed sources within Toyota, says the two companies will develop a prototype in the coming months. Engineers from Toyota met their counterparts from Tesla earlier this month to discuss the project. They will check the reliability of the batteries to be used in the vehicle and see if the computer control system will work during the developmental period.

“We want to fit Toyota’s existing model with Tesla’s batteries” in the development, an unidentified Toyota executive said, according to Kyodo.

“Exiting model” makes us think Toyota might be considering something like the FT-EV concept (pictured), which is essentially an electrified Toyota iQ microcar. That’s purely speculation because no one at Toyota or Tesla will say what they may or may not be up to. But the FT-EV makes sense because it would provide Toyota with a relatively quick entry into the budding EV market, and it could compete with the Smart ForTwo Electric Drive and Mitsubishi i-MiEV.

Toyota, responding to the Kyodo News report, told Bloomberg it does not have a timeline for any vehicles that might result from its partnership with Tesla. Under the partnership announced last month, Toyota sold the New United Motor Manufacturing Inc. factory in Fremont, California, to Tesla for $42 million and promised to buy $50 million worth of stock when Tesla goes public.

The two companies also agreed to work together on an electric vehicle. Tesla CEO Elon Musk has said a Toyota featuring a Tesla drivetrain will hit the road before the Tesla Model S sedan, which Tesla says will arrive in 2012.

Tesla spokesman Ricardo Reyes said he could not comment because the company is in the “quiet period” required by the Securities and Exchange Commission as it prepares to go public.

Photo: Toyota

Tesla Motors CEO Elon Musk just closed a $50 million deal with Toyota, but his personal finances are a mess. By his own admission, he’s busted.

“About four months ago, I ran out of money,” Musk wrote in a court filing, dated Feb. 23, unearthed by Owen Thomas of VentureBeat.

The long and the short of it is Musk, who made his fortune at Zip2 and PayPal, has since October been living on loans from friends. The revelations are contained within the paperwork filed during Musk’s divorce from his wife, Justine Musk. VentureBeat says it’s been a contentious split and it has further strained Musk’s finances.

According to the court filings, Musk earned an average of $17.8 million annually between 2005 and 2008 and brought in another $48 million in investment income. He has sunk a lot of that money into Tesla Motors, his aerospace firm Space-X and his solar energy startup SolarCity.

The state of Musk’s finances are more than a Silicon Valley soap opera — Musk is the lead investor in Tesla and a primary source of money since its founding in 2003.

Tesla burned through $236.4 million between its founding and the third quarter of last year. It lost another $37 million in the last three months of last year, according to a revised S1 form Tesla filed with the Securities and Exchange Commission ahead of its impending initial public offering. The losses fell to $8.4 million in the first quarter of 2010 as Tesla started drawing on a $465 million loan from the Department of Energy.

As VentureBeat notes, the best way for Musk to dig himself out of this hole is for Tesla to go public so he can cash out some of the 81 million shares he holds in the company. Tesla hopes to raise $100 million, and Toyota has agreed to buy $50 million in stock but only if the IPO happens by Dec. 31.

Musk can’t cash out completely because the federal loan requires him to stick around until the Model S sedan built. But his future, like that of his company, is increasingly dependent upon a successful IPO. And that provides further evidence that the Toyota-Tesla deal was as much about image as it was about innovation.

Having Toyota in his corner makes Tesla’s IPO that much more attractive to the investors who will bail out Tesla, and the man leading it.

Photo: Jim Merithew / Wired.com