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Tesla pushes back production of all-electric sedan

Tesla Motors Inc. said Wednesday that it will scale back the development of its all-electric Model S sedan until its Department of Energy loan guarantee becomes effective, citing the tough economic environment.

The move is expected to push back production of the vehicle, set to be unveiled early next year, by about six months to mid-2011, Elon Musk, the electric car maker's chairman and product architect, said in his company blog.

In addition, Musk said he will become San Carlos-based Tesla's chief executive, replacing Ze'ev Drori, who will remain on Tesla's board as its vice chairman.

Musk said in the blog that as a result of the ongoing upheaval in the financial world, Tesla has decided to focus on area that are producing revenue: the production of its Roadster sports car and powertrain sales to other automakers.

He said demand for the $109,000 Roadster continues to grow despite the ongoing industrywide slump in vehicle demand, while the powertrain business is profitable and growing.

Musk said Tesla remains committed to the Model S, whose $60,000 price tag would appeal to more buyers, but the company will reduce activity on production engineering, tooling and supplier commitments until the loan guarantee comes through.

"The DOE loan guarantee will cover most of the Model S program at a very low cost of capital compared with raising equity financing in what could quaintly be described as a `bear market,'" Musk wrote.

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Tesla Motors Inc. said Wednesday that it will scale back the development of its all-electric Model S sedan until its Department of Energy loan guarantee becomes effective, citing the tough economic environment.
So the government loan guarantees are the latest venture capital? I thought it was more for shoring-up existing industry.
 

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It pains me to watch this. And it pains me to say that I can't see them surviving. I still believe the folks who founded Tesla did not truly comprehend how expensive it is to actually design and then build cars. We all know it costs billions to bring out a new platform and drivetrain, and yet Tesla planned to do it on a shoestring budget. It just wasn't feasible, and now they're in serious trouble.

And looking at the number of cars they've built, they're still so far behind 2008 builds they simply can't catch up. Sure, "demand" may be there but they're not even close to meeting it. At present they have 27 cars out the door but the waiting list that I saw back in the Spring was about 1200, when the first car went out the door. At this rate they'll get those 1200 customers their cars by 2028.

The other worrying aspect of the various announcements I've seen the past 2 days is that they're planning on laying off design members for the sedan. That's bad news as it will push the sedan out further than the few months delay Tesla is claiming.

I hope I'm wrong, but it seems like a serious underestimation of the costs of actually designing and building a modern car in today's world.
 

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I can't say I'm surprised. These guys displayed a level of ****y know-it-all attitude that led them here. Like Zete said, the underestimated how difficult it is to make a car. When you consider that all their work was focused on a powertrain (reusing a Lotus), it's hard to imagine how these guys would design something from the ground up.

Mark
 

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Dare I say it?????

VAPORWARE at it's worst.

Sad to see actually. All hype and no firm base of financial commitment. The result wasn't really unexpected. another pipe dream on the ever mounting pile of similar ventures out there.
 

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lotus only builds 4500 elises per year. 27 cars per year is practically a kit car. can't tesla sell the chassis and rear subframe as separate units, and say "some assembly required"? then it wouldn't have to be a 'real' car that has to meet collision standards (even though it does).

collision standards are meaningless...no other car on the road is anywhere near the weight of the elise. the tesla is at least near 3000 lb.

kokam can give tesla a battery with 100 cells/26 kWh/429 lb versus their 6872 cell/53 kWh/990 lb. while it will have slightly over 125 mile range, it will weigh ~2412 lb. the kokam li-po are much smaller, and will lower the c of g.

i imagine a sedan with a less powerful motor, and similar weight will have very good range with the same battery.
 

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It was either pure arrogance or desperation on Tesla's part in even attempting to spin up the Whitestar project before they ensured the success of their primary product.

I've been saying this for a few months now: Tesla has only raised $146M in venture funding. That's not enough money to run a car company. Even at $100k, they likely aren't making any money on the roadster. If they sell 1800 of them this year, that's only $180M in revenue. After they pay Lotus, their suppliers, and employees, I don't see much money left. Since they're underfunded, they're probably paying their suppliers on credit. With the credit market drying up, they're likely having a hard time making their payments.

My guess is that Tesla was expecting to have an IPO this year or early next year to raise more capital. The Whitestar project was probably something to get potential investors excited about the company so that Tesla could demand a greater premium on the IPO shares. This is very typical of a Silicon Valley company and is the very definition of "vaporware". However, they didn't count on the bottom of the market falling out, making it a poor climate for an offering.
 

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It pains me to watch this. And it pains me to say that I can't see them surviving. I still believe the folks who founded Tesla did not truly comprehend how expensive it is to actually design and then build cars. We all know it costs billions to bring out a new platform and drivetrain, and yet Tesla planned to do it on a shoestring budget. It just wasn't feasible, and now they're in serious trouble.

And looking at the number of cars they've built, they're still so far behind 2008 builds they simply can't catch up. Sure, "demand" may be there but they're not even close to meeting it. At present they have 27 cars out the door but the waiting list that I saw back in the Spring was about 1200, when the first car went out the door. At this rate they'll get those 1200 customers their cars by 2028.

The other worrying aspect of the various announcements I've seen the past 2 days is that they're planning on laying off design members for the sedan. That's bad news as it will push the sedan out further than the few months delay Tesla is claiming.

I hope I'm wrong, but it seems like a serious underestimation of the costs of actually designing and building a modern car in today's world.
The problem was the reason all of this is that expensive was because Detroit was old fashioned, didn't know what it was doing, and couldn't manage it's way out of a paper bag. :fall:

Unless of course all of that archaic nonsense that Detroit does exists, um, for a reason? This is why consultants screw stuff up so often and do it so well, they don't have much insight or knowledge about an industry beyond making a good PowerPoint presentation.

Although, perhaps Telsa should have kept some of their former Detroiters... they could teach the brass in Silicon Valley a thing or two about managing a proper layoff... :lmao::eek:
 
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