Pictures in the indexes!!! Click Here!!!
0 Members and 1 Guest are viewing this topic.
Last week, Tesla Motors, Silicon Valley’s favorite electric-car start-up, replaced its chief executive, laid off employees and delayed production of its second car. On Friday, Elon Musk, Tesla’s new chief executive and its largest investor, elaborated on the turmoil at the company in an interview. Mr. Musk said that 87 people — about a quarter of the company — were laid off in the current retrenchment. He also said that the company’s second model, a battery-powered sedan called the Model S, was delayed because Tesla was having trouble raising the $100 million it needed for its next phase. Rather than turn entirely to current investors, including Google’s co-founders, Larry Page and Sergey Brin, and the former eBay president, Jeff Skoll, Tesla decided to ratchet back the fund-raising and slow its expansion. Tesla’s troubles are not new. Mr. Musk is the fourth chief executive of the San Carlos, Calif., company since it was founded in 2003. The production delay follows a long line of other delays. Mr. Musk, who made his fortune from the sale of the online payment site, PayPal, to eBay, acknowledged that building cars has taken four times the time and effort he expected. He has invested $55 million of his own money into Tesla, which is why he stepped in to replace Ze’ev Drori as chief executive as the company reached yet another crossroads. “We’re going through a very difficult economic period and I’ve got so many chips on the table with Tesla, it just made sense for me to have both hands on the wheel,” he said. Running Tesla means scaling back his commitment to SpaceX, which launched its first rocket in September. Although he will remain CEO of SpaceX, Mr. Musk said he will cut back his time there from about 70 percent to 50 percent. Tesla has raised $146 million from venture capitalists and angel investors. The company had been trying to raise another $100 million when the credit crisis hit. The terms on the money became “very egregious,” Mr. Musk said, so Tesla decided to go back to past investors for $20 million to $30 million instead. Although the company’s existing backers are wealthy enough to have easily come up with the full $100 million between them, “they wanted us, and I wanted us, to go raise external money rather than have the whole thing be funded internally,” Mr. Musk said. The $100 million would have gone toward producing the Model S, the battery-powered sedan that Tesla had promised in 2010. Instead, the company delayed the car’s debut to mid-2011 and is waiting on a low-interest Department of Energy loan due in six to eight months. That will cover about three-quarters of the cost of the Model S. Tesla will try to raise another $50 million or so after the loan comes through. By then, Mr. Musk said, he hopes that the markets will have stabilized and potential investors will see Tesla as a less risky investment because of the government loan. He also hopes to get some of the federal government’s $25 billion bailout package for the auto industry, 10 percent of which is reserved for small car companies. The latest delay in production of the Model S, which will be made in San Jose, will put the car on the road after the electric Chevrolet Volt. Mr. Musk said he welcomed the competition. “The reason I put so much time and energy into helping create Tesla was to spur the existing car industry to go electric,” he said. Mr. Musk attributed the bulk of Tesla’s problems to its first chief executive, Martin Eberhard, whom Mr. Musk said spent too much money and too many years developing the company’s first car. “It’s taken us about a year to correct major errors,” Mr. Musk said. Mr. Eberhard, who is now an entrepreneur at Mayfield Fund, disputed that. “He’s still blaming it on me a year later and three C.E.O.s later?” he said. “Look at the constant factor at the company through all the years: Elon.” Tesla’s first car, the $109,000 Roadster, has a year-long waiting list,and Tesla is shipping 10 each week, Mr. Musk said. Tesla was at first losing money on the Roadster but now the car is “just barely” gross-margin-positive, he said. He plans to further reduce the cost of making the car and cut operating expenses to get the company to cash-flow-positive in six to nine months. The Model S will cost less than the Roadster, but will still be pricey at around $60,000. Mr. Musk acknowledged that now-declining gas prices will reduce the appeal of a mass-market electric car more than a high-end sports car. Still, he said, the cost of charging the sedan’s battery would be one-tenth that of filling up the tank at current gas prices. He also predicted that gas prices will start rising again, climbing as high as $7 a gallon in the next few years.
