Tesla in financial trouble?

[Randy Chase]

Word out that the credit crunch and cost of product introduction is having an impact at Tesla.

Layoffs, boardroom reshuffles at Tesla Motors ? The Register

Rumours of layoffs and management reshuffles at Tesla Motors - maker of the famous but as-yet-scarce Roadster electrosupercar - have been confirmed. In the next few hours Elon Musk, Tesla chairman, is expected to announce that he has formally superseded Ze'ev Drori as CEO. Details of "strategic layoffs" will also be revealed.

A Tesla representative confirmed the moves to the Reg this afternoon. It appears that Mr Drori will remain at Tesla, assuming the title "vice chairman" and remaining on the board, while Mr Musk assumes even greater day-to-day control of the firm.

Rumours had been circulating all day that changes at Tesla were afoot, with suggestions made that 100 employees might be let go in California - as much as half the existing staff. Mr Musk is expected to go into some detail on the corporate blog network as to just who will be departing, but the Reg was told that the higher figures are "grossly exaggerated". The layoffs are said to be "in response to the global liquidity crisis".

Tesla would certainly appear to be vulnerable to the credit crunch and general feeling of unease. The firm has ambitious plans, with a new model set to go into production, but has so far delivered just forty cars - and these have "intermediate" transmissions, unable to achieve the promised performance which Roadster buyers have paid high prices for.

Tesla has pledged to replace these transmissions at no further charge, which could easily wipe out much of the profit made on early deliveries. Meanwhile, the current tally of orders for the Roadster stands at just 1200.

As for the boardroom reshuffle, this may be no more than an acknowledgement of reality. Elon Musk is well known to be an extremely hands-on company chairman at Tesla, even to the extent of personally designing bodywork. As the main money man behind the company, his job - and that of any other Tesla employee - is pretty much whatever Mr Musk says it is.

[...m...]

...not at all surprised...

[LARRY]

Had one in front of me the other day.

Fast, smooth, gorgeous...

I hope they survive.

[Jamolah]

This isn't a huge surprise.
Considering mainstream, big car companies are struggling. Can you imagine a niche car, behind on schedule with no prior history. Yikes, talk about launching their cars at the wrong possible time!

[thomasde]

Liquidity is affecting all buyers, but I could see a few companies looking for Tesla as a prize and a showpiece, and a way to generate excitement for a whole line of hybrids and electrics. GM, for example, has been working on electric cars for a decade and has yet to generate excitement for it. Perhaps Tesla is positioned beautifully for a buyout?

[...m...]

Originally Posted by thomasde

GM, for example, has been working on electric cars for a decade and has yet to generate excitement for it.

...nonsense - they had people lined up begging for the EV-1 and refused to sell it, parlayed the patents off to a big oil company, and killed the project...

...tesla's problem is that they're bloated: overpaid middlemen repackaging extant technology to an underserved niche as an overpriced exotic luxury...that business model can work well in a boomtime economy, but it's the first thing to go when times turn lean...given their production volume, though, i'm unconvinced that that's actually tesla's business model - i think they want to play venture capital games and cash out when the moment's ripe...

[apk919]

Originally Posted by ...m...

...nonsense - they had people lined up begging for the EV-1 and refused to sell it, parlayed the patents off to a big oil company, and killed the project...

...tesla's problem is that they're bloated: overpaid middlemen repackaging extant technology to an underserved niche as an overpriced exotic luxury...that business model can work well in a boomtime economy, but it's the first thing to go when times turn lean...given their production volume, though, i'm unconvinced that that's actually tesla's business model - i think they want to play venture capital games and cash out when the moment's ripe...

Don't tell me... you watched "Who Killed The Electric Car?"...

EDIT: Here's the biggest problem... gasoline stores ~46.4 MegaJoules/kg (energy density), and a lithium ion battery stores about 720 KiloJoules/kg. So if you put 15 gallons of gas in a car (41 kg), you've got 1,900 MegaJoules of potential energy in that 15 gallon tank. The equivalent energy in lithium ion batteries would weigh 2,600 kg.

[LARRY]

There's a flood of electric cars coming.

GM is finally getting the battery tested and locked in.

[JWA]

Originally Posted by ...m...

...nonsense - they had people lined up begging for the EV-1 and refused to sell it

I remember handful of owners who wanted to buy them after the lease was up, but don't remember any lines when they were actually available for sale.

[apk919]

Originally Posted by LARRY

There's a flood of electric cars coming.

GM is finally getting the battery tested and locked in.

Where are you getting that info? Any links?

[jlj3394]

Originally Posted by apk919

Don't tell me... you watched "Who Killed The Electric Car?"...

EDIT: Here's the biggest problem... gasoline stores ~46.4 MegaJoules/kg (energy density), and a lithium ion battery stores about 720 KiloJoules/kg. So if you put 15 gallons of gas in a car (41 kg), you've got 1,900 MegaJoules of potential energy in that 15 gallon tank. The equivalent energy in lithium ion batteries would weigh 2,600 kg.

True. But the internal combustion engine wastes a lot of that energy. Electric motors can be MUCH more efficient.

[AgentTripleX]

Blog from the new CEO - Tesla Motors - think

[apk919]

Originally Posted by jlj3394

True. But the internal combustion engine wastes a lot of that energy. Electric motors can be MUCH more efficient.

Well, I think that internal combustion engines are approaching 40% efficiency under optimal conditions... that only cuts the usable energy density of gasoline in half or so.

That's why hybrid systems work so well... they can use batteries when they're most efficient, and internal combustion when high energy demand is needed. Not to mention regenerative braking, etc.

[Bavarian Motorist]

Tesla is about to become the biggest fail of the decade if they don't get it together. They intend to produce 20 cars/week by December now that, supposedly, the new and improved transmission is complete.


Well, if it's complete...let's see some cars roll out already.

[MattG]

I think startups by definition are always in financial trouble of one sort or another!

[Randy Chase]

Originally Posted by MattG

I think startups by definition are always in financial trouble of one sort or another!

I think this is very true. It is all about managing the crisis continuously. Turmoil and upheaval is not a new thing for Tesla either.

Nothing tells me that they are failing, just managing things a bit as they pull back due to market forces and financials.

[Greg]

Originally Posted by MattG

I think startups by definition are always in financial trouble of one sort or another!

Agreed. Elon talks of getting to "cash positive" with 6-9 months. Well that ain't gonna help you service your debt 89 acres in san jose seems crazy for a manufacturing plant. Can't they build in Alabama or something? What happened to their site in Arizona?

'Greg

[Bavarian Motorist]

Originally Posted by Randy Chase

Nothing tells me that they are failing, just managing things a bit as they pull back due to market forces and financials.

The reason I say failing is because the hype is dying quickly for this vehicle that was entirely built on hype.


The window of opportunity is closing. Consumers get bored and move on. And now people are much less likely to buy than ever. Not least of all, gas prices, as I've observed, are falling quite rapidly.


I want to share an anecdote of what I "learned" in my management & organizational theories class 2 weeks ago. We were learning about focus products and my professor mentioned the Tesla as one of these products. According to her, you had to wait 3 years on a waiting list before you can even TEST DRIVE one, and Tesla is only producing 10 per year. I sent her an email with more correct information, but don't think she received it.

How many others think like her? Perhaps it was an isolated incident of misinformation, but perhaps not.

[Randy Chase]

I don't agree with the premise that this was only built on hype and that the hype is failing. This is a company building a unique car (kinda like Lotus does) and people want it.

Having one teacher being clueless is not much as far as damning evidence of the general market. The world is full of clueless people, you don't have to sell to all of them.

[Randy Chase]

The thing about the Internet is how fast bad data can spread. People believe stuff, pass it on. Everyone is an expert.

Reality is that Tesla is delivering cars. They are building about 10 a week. 500+ cars a year is not bad for such a small company (kinda like Lotus). You can get a test drive right now.