It may be hard for followers of this series to believe, but in an interview with VentureWire [sub], Tesla Motors' freshly-minted CEO Ze'ev Drori reveals that he's raised another $40m for the ill-fated electric sports car maker. And that's only the first round. This cash grab comes on top of the $100m Tesla has already burned in their seemingly endless pursuit of a production-ready Roadster. C/Net says the cash conflagration has caught the attention of dot bombers who've been there, done that, left the luxurious offices. "When companies get past the $100 million mark in funding without releasing a product, eyebrows start to go up in Silicon Valley. Something about that number tends to bring out skeptics." Why even C/Net is starting to ask a few questions (not to Tesla itself, but what the hey). "The delay of the Roadster could, possibly, lead to delays with the company's plans to come out with an all-electric sedan. Tesla has been hoping to come out with that in late 2009 or early 2010."
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How do you spell Tesla?
V-A-P-O-U-R-W-A-R-E
Will the Volt beat the Tesla to market?
The only Electric Elise this world will ever drive is on Playstation.
I’m not sure that I’d call Tesla vapourware; they are at least providing ride-alongs to some of those eager (brave?) enough to put down a deposit. From what I’ve read they also produced 20 prototypes (though I’m not sure if that meant stripping 20 Elises for reconstruction) that were actually driveable (and crashable). Sure it’s not much, but it’s pretty “real” in comparison to another electric sports coupe that has already been featured in TV commercials…
I’m curious about the math on this car and this Tesla vapourware. They have burned through $100m already and if they get the car out will probably have blown through another $100m. So that puts the price tag at $200m for development and start up costs for this FIRST car. How many of these roadsters to they plan to ship the first 2 years?
I’m thinking about the sedan that comes next as I’m asking all this. Lets say they ship 500(a very optomistic number I think) cars in those 2 years. How much profit could they possibly be generating from those $100k roadsters, since they are buying chassis from Lotus and it has super expensive batteries. Another optomistic number lets say $20k. $20,000 times 500 equals $10million in profit over 2 years. How on earth is that going to be enough to help develop the even more expensive sedan they plan to have out in 2 years when they spent $200m on the roadster. They just going to keep finding investors and never give them a return on their investment. I know your going to say it wont cost as much except for the fact they have to design a purpose built platform for that project like they claimed they would due. Sure the drive system is 75% there using what they have already developed, but this from scratch or even a highly modified one from someone else is going to be really expensive due to it’s size and needs or practicality.
This doesn’t even take out a huge chunk of money for the investors seeing something from the deal, now that Eberhart is gone who is going to say no to them taking their piece. I really think this company is a big sham. But I’m sure there are some knowledgeable commentors that can shed light how the venture capitalists might adress these development costs and projected profits.
I love their imaginary Volt-like 2 year timeline for this sedan. I have a feeling the plug will be pulled on the Tesla company after a few hundred cars are shipped and the money men still dont see the money rolling in, let alone dump more money for an even more expensive to develop car at a lower price point. It really pisses me off they used Nikola Tesla’s name, the guy doesn’t get enough justice as it is and when this fails he will just have more crap piled on his legacy.
I am not ready to call vapor yet.
Considering it takes the established car companies hundreds of millions, if not billions, to create a new model, getting Tesla to market for under 200 Million is a considerable feat in my book. Remember this is not a three wheel “car” (*cough* motorcycle) or neighborhood golf cart that avoids all the regulations. It has to be engineered to the same safety standards as all the other real cars.
It is an uphill challenge to launch a new car company from scratch and I think the odds are against Tesla succeeding long term, but it is a little early to write them off yet.
I wish them luck.
Of course, the real problem of Tesla is that, unlike other Silicon Valley startups, they don’t bring anything new to the party. Mr. Tesla himself lived 100 years ago!
Part of the fun of a sports car is shifting the gears yourself while the engine makes great sounds. That car misses on both of those items. I think I’d have more fun in a gasoline powered Lotus and can use that $50k I saved to buy 350k miles worth of gasoline.
Trilogy Systems burned through $250M of 1980 cash pursing the wafer scale integration dream. It was founded by then guru Gene Amdahl and had a score of high profile VCs and engineer/managers behind it. A decade or so later saw the great tablet PC craze with Pen Computing going through a huge pile of cash only to fail. Then again who can forget the spectacular Webvan online grocery flop, pets.com and etoys.com?
Part of Silicon Valley’s skill set is a PR hype machine second only to those of political campaigns.
If all electric cars become a mass market item they are almost certainly going to come from one or more of the established automotive companies.
Tesla and it’s ilk will probably be reduced to making “we moved the conversation in our direction” concession speeches.
Buildin’ cars is hard! -tm