Elon Musk mulls creating holding firm for his shares in Tesla and SpaceX

Article by Anita Panait, on August 31, 2012

Elon Musk, the founder of Space Exploration Technologies Corp., also known as SpaceX, and co-founder of Tesla Motors Inc., told Bloomberg in a Web chat that he is considering a plan to form a holding company for the shares of his rocket launch and electric car businesses. Musk told Bloomberg that although he is not sure if forming a holding company for his shares is feasible or sensible, he is thinking about it.

In an e-mail to Bloomberg, Musk said that there is still no formal plan yet to create a parent entity for Tesla and SpaceX.  He remarked that it “gets unwieldy to have lots of companies” with him as the only connection. Musk has said that his aerospace company, also known as SpaceX, may hold an initial public offering of its shares in 2013.

In May, SpaceX became the first private firm to send a spacecraft to supply the International Space Station. The US government this month awarded the aerospace company a $440 million contract to develop spacecraft for future cargo missions.

Musk has remarked that Tesla, which held an IPO in 2010, may post profits as early as 2013 from sales of Model S electric sedans.

Musk said on the Web chat that Tesla, in which he is the chief executive and biggest investor, is studying the addition of an electric “supercar,” which segment includes racing-style models from Ferrari and Lamborghini. A supercar could cost more than $200,000.

According to Musk, Tesla initially considered producing a supercar after the 2013 launch of the battery-powered Model X sport-utility vehicle. Tesla dropped the plan, after deciding that producing more affordable electric car would be more appreciated by the public.

But Tesla hasn’t given up on its supercar plans. Musk told Bloomberg on the Web chat that Tesla would “get to an electric supercar” in four to five years.

Tesla commenced the production of its Model S in June at its Fremont plant in California. The Model S has a starting price of $57,400 and it may fetch a tag of over $100,000, depending on battery pack size and other options. The vehicle qualifies for a $7,500 federal tax credit.

Topics: elon musk, tesla

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