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Tesla Motors Shaken Up, Laying Off
tjstork writes "Tesla Motors, the darling of technorati for its high performance electric car, may be about to go belly up. Venture capital is cut off, layoffs are under way, and construction plans are being stretched out. Elon Musk has ousted the CEO and taken the reins, blaming the global credit crunch."
Tesla Motors consistently overpromised and underdelivered on their product. Their ambitions far outweighed their ability to execute their business plan, and their product roadmap was beyond with their engineering talent.
Au revoir, Tesla. Looks like the first really useful production electric cars will come from a real car company (like Renault/Nissan), not a bunch of Internet egoists.
Tesla Motors struggling doesn't affect millions of Americans.
I work for Honda and I don't want to see GM or Ford go belly up because it would hurt us as well as Toyota. We've already had to deal with numerous suppliers shutting down due to GM/Ford plant closures. A good portion of our suppliers built parts for multiple OEMs. When the bigger ones go belly up, the ripple is felt throughout the supply chain.
GM or Ford going out of business might give us more sales, but considering how many suppliers would shut down, our business would suffer immensely. That doesn't even consider the number of people who lose their job and no longer afford buying the car.
I don't like the bail out, the Detroit automakers had poor vision and now are suffering for it, but it's bad for the industry if they don't survive.
"Action without philosophy is a lethal weapon; philosophy without action is worthless."
Wil Shipley of Delicious Monster test drove a Tesla and wrote about it in his blog.
Here is part of what he had to say about:
It's crazy-fast. It handles like a jet fighter. It gets the equivalent of about 140 mpg. It has no gears. It requires almost no maintenance.e It's gorgeous. It's whisper-quiet. And, in Seattle, runs off hydro power.
Ceci n'est pas une signature.
If GM lasts long enough to build it there is real innovation in the Chevrolet Volt.
Tesla is interesting in its way, but it is not a car that many could hope to afford. Perhaps the best thing Tesla Motors has done is convince Bob Lutz that GM could/should make a real effort at at practical electric car.
Additional Volt information from a fan of the project.
I had only hoped they'd go another couple years, drop the prices a few thousand, and have service centers in a few more areas near where I like to live.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Elon Musk has ousted the CEO and taken the reins, blaming the global credit crunch.
That's odd. Usually when a CEO totally fscks up a company, they give him huge bonuses and lay off more technical workers. In this case, they are admitting that it is due to the global credit crunch, which I am pretty sure is not the CEOs fault, and yet they are firing him anyway.
Bizarre.
If you are not allowed to question your government then the government has answered your question.
You are correct. However, what we have is not so much a credit crunch as we do a "Truth crunch." Peoples ability to use smoke and mirrors to get credit has dried up in an instant. Those without sound, impressive, and extremely plausable plans are being kicked out in the street. Those with marginal plans are probably taking the gas pipe as well.
People are not buying bullshit anymore. Not because they don't believe the bullshit; they never did. They are not buying it because they can not sell it on to someone else.
Something I've never understood is how the government got the money to pay for the war machines, bombs, and bullets. I mean, you hear all the time how that got us out of the depression, but it just doesn't add up.
Was the government printing money at that point? Is that what did it? Because overprinting money is generally not a good thing, and is arguably one of the reasons we're having problems right now.
Well said! Now, if only we could have a "lobbying crunch" so that banks who demand major intervention to avoid the atrocity of having to honor obligations or pay a few tenths of a percent more (annualized!) on interbank loans, would be rightly laughed at.
It's pretty sad how Tesla Motors has a proven ability to make high-quality, practical (at least once they can get unit costs down) green cars that people want, and it's GM and Ford who are getting the $25 billion in well-below-market-rate loans[1] to do something they should have been doing ten years ago.
[1] GM, for example, has an effective borrowing cost on new capital of about 30%/year, more than most compulsive shoppers and banana republics pay, as that is the yield that their bonds are maturing at if they mature in just three years. Yet they're only having to pay something like 5% on the government loan. Tesla, by the way, would kiss the ground for a loan that size at three times the rate.
Information theory is life. The rest is just the KL divergence.
given the American auto industry's reactionary and disingenuous attitude towards eco-vehicles, i think Tesla would be better off allying itself with a foreign company such as Honda or Toyota, both of which have shown a genuine interest in meeting public demand for environmentally friendly vehicles.
besides, foreign car companies have been doing much better than American auto companies in recent years. this is at least partly because they're more technologically innovative. Japanese auto makers seem more willing to research and develop new technologies than American car manufacturers. the Tesla Roadster would likely just go the way of the EV1 if put in the hands of Ford or GM.
Absolutely . With the $25 billion bailouts for the other Car Manufactures (Slow Loading . . .), we could all have Tesla cars. The big Car Manufacturers should ally themselves with Tesla Motors, or Time to cut the cord.
quick quote for those that don't wanna wait for that slow as fucking shit to load.
"Aug. 22 (Bloomberg) -- General Motors Corp., Ford Motor Co., Chrysler LLC and U.S. auto-parts makers are seeking $50 billion in government-backed loans, double their initial request, to develop and build more fuel-efficient vehicles."
The whole situation in America is completely back-ass-wards as well as completely unsustainable. We shouldn't be paying $700 billion to the same people that gambled, we should toss them in jail forever. IF $700 billion should be used for anything it should be used to start manufacturing something again.
Not one penny of benefit will be seen by Main Street from this bailout bull crap! It's been lies from the beginning. Fucking government bank robbers. AIG continues to draw on their "credit line" with The Fed. Why suddenly is there $80 billion of hard money required in a business that is "fundamentally sound" in excess of cash flow, and where that requirement did not previously exist?
When the fuck are we going to breakout with the Federal Prosecutors!? After the dollar is worth Zero?
Frankly I consider the Roadster a more likely success than the Volt, at least if they can survive long enough to start shipping cars in reasonable volume.
The Roadster costs $100,000 mostly because it stacks enough LiIon batteries to provide the current for a 0-60 time to rival any other sports car, and to give it a 250 mile range. $100k is not very expensive for a sports car. It blows away Ferraris in the same price range.
The Volt on the other hand is only a great idea if it gives you enough battery power to make your daily commute without using the gas engine. It is going to cost around $50,000 with only a 40 mile range, which I would wager has a lot to do with the fact that it has to be a more practical 5-person family sedan rather than a tiny 2-seater Lotus body, and has to have an ICE even though it's small, and thus weights a lot more. The Roadster's weight is pretty much entirely in the battery packs.
People already question whether or not a Prius is worth it economically, and at least perceived economy is a major reason people buy them. I don't see a family/commuter car costing twice as much to be a huge seller or game change. I'd love to be wrong, because I think the Volt -is- a fantastic idea, but it seriously has to come down in price to stand anything remotely resembling a chance.
The Roadster on the other hand seems to be just at the right price for what it is.
Neither will usher in an era of alternative vehicles as it stands, imo. I'm not sure that means either should be denied the title of "innovative", however.
The enemies of Democracy are
If your product works, or at least appears to, and you have a sound plan for getting it to market, where it will be purchased, then SOMEONE will loan you the money.
Actually, that not being true could be one definition of a "credit crisis".
I will now perform for your amazement, my amazing one sentence and one paragraph explanations of "the credit crisis". Please note that these do not constitute economic advice nor advice on treasury policy, they are intended strictly for entertainment purposes only.
One sentence explanation:
Investors sometimes choose to ignore opportunities for what looks like relatively certain profit because what is rational economical behavior on the part of an individual or enterprise in times of relative certainty differs from what is rational in times of relative uncertainty.
One paragraph explanation:
Many important companies (banks of course, but also big companies) generate and spend huge amounts of cash. However, this is not in the form of things like dollar bills; even small businesses the "cash" on their ledgers represents a right to demand credit or actual physical dollars from a bank. Businesses don't want dollar bills: cash is credit. Large businesses who deal in stupendous flows of cash don't want that cash on their ledgers for more than a microsecond, because even with modest inflation that translates into millions of dollars lost. So they turn cash into securities: investments that return enough to offset inflation (or a bit more ideally), but can be turned with a great deal of certainty to a known amount of cash (which of course is usually just credit but could be sacks of dollars) at a specific future date. "A specific future date" is not the same as "right this very instant"; so businesses do have a small amount of actual cash -- well, credit at a bank really -- on their ledgers, but it really isn't enough for large cash volume companies like Home Depot or Coke and certainly not enough for banks. So they get credit and extend credit, and credit is the primary currency used in the economy. Both operation depend on the certainty of that promise of future cash: to secure credit, and ensure that upcoming obligations can be covered. When securities held by company A become uncertain, it cannot get credit from company B; nor can it extend credit to company C without possibly failing to meet its short term obligations (a condition known as bankruptcy). This has a ripple effect because C uses A's debt as a security, and B needs A's credit to meet its own short term obligations. So credit is frozen in limbo, and since credit is the primary currency used in the economy, cash stops moving, even to safe investments, because a safe investment is not safe for a company that needs the cash before the investment matures.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Seconded the above. At the time of the dotcom boom my uncle had a new filling machine ready for manufacture. He had orders. He just needed some additional money to build it. He tried banks, VCs, every one he could think of and drew a blank. Yet at the same time VC threw countless money at any proposition that ended '... and its on the internet'.
You may think me a tired, old, cynic. I'd have to disagree about the tired bit.
They wouldn't have remained popular in the past, but what about the future:
Once you get beyond 7 point adjustable, heated and cooled seats, do you ever need more? If the seats are easily replaceable and just need a power/data connection, it's just not hard to upgrade.
Upgrades/replacement render the upholstery issue moot too.
Hopefully the battery module has a pretty simple interface to the engine/drive system, so upgrading there isn't difficult either.
Really, with fully electric cars, there should be only 3 parts that are a challenge to upgrade:
The frame. This is essentially what you're handing down to your grandchildren. If you replace the frame, you may as well buy a new car, because you've lost any of the 'classic' value.
The engine. This can be challenging because the placement and size of it are typically tied tightly to the frame, but it IS still often possible, even for gas powered engines for which it is a greater challenge.
The interior design. In most cases, the interior design is essentially part of the frame. If there are must have items in the future that fundamentally redesign the interior layout of cars, you're in trouble with your classic (consider where to mount your dvd player in your model T so your kids don't distract you while driving). Where exactly do you mount your 1 cubic foot holography-tv in your tesla?
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
Comment removed based on user account deletion
Are those goals mutually exclusive?