Tesla Motors founder & chief executive Elon Musk has reiterated that his company would offer a compact electric vehicle (EV) that would be more affordable than the Model S and better than the Nissan Leaf.

Mr. Musk said that the Model S is a compelling car but it is too expensive to afford for most people; while the Nissan Leaf is cheap, but it is not great.

He stressed that the world needed is a great as well as affordable electric car, which Tesla would provide.

At a festive event held at its Fremont auto plant on Friday, Tesla Motors delivered to the customers its first Model S electric cars, which the company claims is the first premium electric sedan in the world.

Nearly 1,000 people, including Governor Jerry Brown, participated in the `first Model S delivery' event, the atmosphere of which was more like that of a pep rally or a revival congregation.

A collaboration of Toyota Motor Corp. and Tesla Motors Inc., is all set to pull out a battery-laden model of RAV4 compacted sports car as soon as 2012.

The duo proclaimed that plan on Friday, adding that they have already started the development of the car. They are likely to launch it after two years.

A sample of the vehicle has already been developed by Tesla, which is being tested by the collaboration now.

Chief Executive Officers Akio Toyoda of Toyota and Elon Musk of Tesla, had declared that the agreement between the two automobile giants in May.

Tesla will be on roads soon with its improved features. Though the manufacturer Company is not expected to go for its gradation, the new version of the fourth generation roadster, the 2.5, will soon be hitting the roads.

A lot of improvements have been made in the old model, including the interiors, with large touch screen, the power control hardware that allows dynamic drive, sophisticated sound-systems, the invigorated front clip and rear diffuser and forged wheel designs.

Tesla Motors Inc., which is the first U. S. auto manufacturer to complete an early public offering in no less than a half century, withdrew its shares for the third straight day to spruce the gain for its initial week of trading to 13%.

The maker of the $109,000 electric Roadster that had been purchased by Brad Pitt and George Clooney slumped 13% to $19.20 in Nasdaq Stock Market trading.

Palo Alto, a California-based firm, had rallied 41% on June 29 after vending its shares above the predicted price range for its $260 million offering.