Tesla Motors recently closed it’s Michigan research facility and fired about a quarter of its workforce. The Silicon Valley start-up might be totally broke and searching for Uncle Sam’s teat, too. Let me rephrase that– they may not have enough cash to remain viable AND they’re looking for a federal bailout/hand out. As you also know (maybe, if you care), Henrik Fisker is set to build a hybrid luxury automobile called the Karma. [ED: not a hybrid between a Mercedes SL/BMW and an Aston, as previous.] Tesla hired Fisker to design their WhiteElephant sedan, After the two decided to part company, Tesla sued Fisker for stealing trade secrets (as if). Fisker won the suit via binding arbitration. They savored the judge’s Tesla tongue-lashing, pocketed a nice chunk of cash for their troubles and publicized the Hell out of the outcome. Long story short, Tesla and Fisker hate each others’ start-up guts. And now Fisker’s announced it’s opening a 34,000-square-foot facility in Pontiac Michigan, good for about 200 employees, where Fisker is planning on building it’s gorgeous four-door Karma hybrid. Fisker says it will offer the Karma in the fourth quarter of 2009. Meanwhile Tesla’s still struggling to produce enough Roadsters to fulfil customers’ deposits. That’s gotta hurt.
Category: Tesla Death Watch
Last week was something of a problem for Tesla Motors. After self-appointed CEO Elon Musk announced cutbacks (i.e. fired a bunch of people and closed their Detroit office), Valleywag (amongst others) reported that the Silicon Valley EV maker was down to its last $9m. For a carmaker, that’s like driving on fumes. Well, it turns out that Tesla had a mole in their midst, who fed the Valleywag website inside info. Which is fair enough. God knows TTAC has its spies friends throughout the industry. And the fact that this grass, Principal Thermal Engineer Peng Zhou was outed within the company, is also no big surprise. But the fact that Elon Musk chose to forward Peng’s mea culpa to everyone in the company [full text after the jump], knowing full well someone would leak THAT, is more than slightly worrying. Then again, discretion is not the better part of fanaticism, egomania and old-fashioned cruelty. Or TTAC’s remit, come to think of it. But then we’re in the muckraking business, not EV manufacture. [thanks to you-know-who-you-are]
Reuters reports that Tesla Motors has secured $40m in additional financing from existing investors. The electric sportscar firm had less than $10m in the bank as of a few days ago, but CEO Elon Musk is still convinced that Tesla has nothing to worry about. “Forty million is significantly more than we need,” Musk said in a statement. “However, the board, investors and I felt it was important to have significant cash reserves.” Except that Tesla failed to secure a $100m round of financing just a month ago, triggering the current cash crisis which has claimed a quarter of Tesla’s workforce and all of its development work. And if you aren’t already bearish on Tesla, consider that the latest round of financing comes in the form of convertible debt. This financing option is described here, but the major benefits to Tesla are that it does not have to place a value on the struggling firm (can you say “upside down?”) and it protects early “angel” investors. What we don’t know is what the “trigger” for this convertible debt is, whether it is filling a specific number of orders, reaching certain financial goals, or what. Whatever the trigger is, whenever it happens, the folks who just ponied up $40m better hope Tesla is in much better shape when that debt converts to equity. If the debt ever converts to equity. Ultimately this news is only good for one category of filth people: lawyers. Convertible debt is notorious for requiring near constant legal oversight. Whatever it takes, right?
Tesla’s heading down the home stretch here on Ye Olde Death Watch. Autocar reports that the Silicon Valley-based EV-maker says its cutting one fifth of its UK workforce. The number of Tesla employees laboring at Lotus’ Hethel factory, where the Tesla Roadster is born, has slipped from 50 to 40, or less. ““We deeply regret the necessity of making redundancies at the Tesla Hethel facility,” said Don Cochrane, UK sales and marketing director at Tesla Motors, who’s still cashing a nice fat paycheck (as far as we know). “It is in the interests of the longer-term health of the company to act prudently now.” Or, perhaps, before. Never mind. Facts never had much currency in Tesla-land, for either the company’s principals or the sycophantic scribes who parroted their PR. For example… “Since the £90,000 Roadster was launched, 125 examples of the groundbreaking electric sports car have been ordered across Europe. All of these are assembled at the Hethel factory at a rate of 40 vehicles per month. Tesla insists this production rate won’t be affected by the staff cutbacks.” Forty a month? Geddowdahere!
Oh noes! According to an unnamed source referred to by Valleywag as “the Tesla insider,” the Silicon Valley electric car maker only has $9m in the bank. And that’s it. Well OK– there’s a bit more. This “insider” (Gawker just loves insiders) is a friend of blogger Owen Thomas and a “longtime employee” (define “longtime” for Tesla.) Problem? They’ve taken “multiple tens of millions” from depositors. And (apparently) spent it. And the “insider” is saying Tesla may just keep the remaining cash and not deliver any more Roadsters. I’ve been standing on the sidelines of this particular Death Watch series (strangely and flatteringly, Valleywag tagged their story “Deathwatch”) because a dear friend of mine works at Tesla. Did I say “works?” I meant worked, as in he got “broomed” the other week when Tesla made with the massive layoffs. Bad move on my part, as it looks like Tesla and friendship just don’t mix. Don’t trust me? Trust the insider, “I actually talked a close friend of mine into putting down $60k for a Tesla Roadster. I cannot conscientiously be a bystander anymore and allow my company to deceive the public and defraud our dear customers. Our customers and the general public are the reason Tesla is so loved. The fact that they are being lied to is just wrong.” Oops! And agreed. Lying is wrong.
If you didn’t know better, you’d read Huffington Post writer (and HUMMER apologist) Matthew DeBord’s essay on Tesla’s travails as a post mortem. “But even though the downfall of Tesla seems like a disaster for boosters of all-electric vehicles, it should be a welcome development for the green-transportation movement. Tesla symbolized a science-fiction view of our future: it seemed like an instant cure for the problems of oil consumption and greenhouse emissions. In reality, it was a well-marketed distraction from a strategy that would yield more immediate results.” In other words, TTAC called it. But it looks like it’s gonna take a while before Tesla’s unsubstantiated claims for its Roadster/ WhiteElephant will R.I.P. “The big knock on electrics was always that they lacked the range of IC-powered cars. Then Tesla came along and not only unveiled a vehicle that could travel hundreds of miles on a single charge, but that could do 0-60 in four seconds. The gorgeous two-seater design, provided by Lotus and crafted in exotic carbon fiber, also didn’t hurt.” But DeBord has a more frightening message– at least for Tesla.
The worm has turned. The unabashed adulation given the Tesla Roadster and its wide-eyed progenitors has turned into something altogether vitriolic. In other words, payback’s a bitch. Even before the first demo Tesla prototype hit the streets, TTAC called on the media to stop the love fest and wait and see if the company’s product lived-up to the hype (250 miles to a charge! Recharge in three hours! Ready by spring!) The “you can only ride with us but not drive or test” press teasers set off ALL our alarm bells. When Tesla spinmeister Daryl Siry withdrew his offer of a TTAC test drive, we knew the company was full of shit (to use the technical term). In fact, the Roadster STILL HASN’T BEEN FULLY INDEPENDENTLY TESTED FOR SAFETY, RANGE AND RECHARGE TIMES. But the unwinding process has begun. And this shot across Tesla’s bow, via Tony’s Climate Change Blog, could leave a mark.
The LA Times puts a name to Tesla’s previously reported pain: “Tesla Chairman and Chief Executive Elon Musk said Friday that Tesla would cut as many as 87 staff and full-time contract workers, or 24% of the 363-person total. The company also will attempt to raise $25 million, rather than the $100 million it had been seeking.” Displaying the talent for fostering corporate culture for which Musk is becoming famous, Musk said only some of the firings were related to the previously blamed economic downturn/downsizing. “Although some reductions were related to the decision to delay the Model S sedan, Musk said many were based on job performance… ‘There needs to be an excellence throughout the organization,’ said Musk, the co-founder of PayPal Inc., who also heads SpaceX, a rocket company in Hawthorne. ‘Somebody who is a good employee at a typical organization wouldn’t cut it at Tesla.'” That’s crazy talk, as in megalomaniacal meltdown. “Musk added that Tesla would model its hiring process on the stringent approaches used by companies such as Google Inc. and Apple Inc. Musk said he would personally interview all finalists for jobs.” $100 to any of the Best and Brightest who can secure and report on a little job-related face time with the man.
In this breathless interview by an adoring newswoman, Elon Musk says that the Tesla Roadster is doing great! And that Tesla’s OEM supply business is doing great! And that the Silicon Valley electric vehicle maker (retrofitter? is slowing down on WhiteElephant sedan development because it’s the fiscally prudent thing to do so. Musk anticipates some cheap government capital in six months (courtesy of tax payers just like you), so why raise more money now? In other words of wisdom, Tesla’ self-appointed CEO says falling gas prices aren’t a concern for the company’s business plan because gas prices “aren’t the main reason” for buying a hot sports car which is “environmentally friendly.” (Hint: it’s all about green cred.) Officially, Musk has “no comment” about specific time frames for an IPO, but says it’s “within the realm of possibilities” that Tesla will fleece more investors let outsiders buy a piece of the automaker’s mean, green dream sometime next year. Meanwhile, if your idea of great reporting is a newsbabe hanging on every word of a sanctimonious rich guy, today’s your lucky day.
When we reported that Tesla was laying off employees at its Michigan engineering center, we thought that was as bad as it got. Well, it seems that the Elon Musk era at Tesla is starting on a worse note than anyone thought possible. Jalopnik reports that employees at Tesla’s Rochester, MI development center did not find out about the layoffs until reading Musk’s blog post saying Rochester would be shut down. Worse still, 90 percent of employees there were simply let go, while the remaining ten percent “have to make their way to the San Jose headquarters with no moving costs covered, no increase in salary and no help getting rid of their old homes,” according to Jalopnik. Not that selling a house in Detroit and relocating to affordable San Jose isn’t a snap. Especially when your boss gives you all of zero warning, and you learn of your firing thanks to the following three sentences: “There will also be some headcount reduction due to consolidation of operations. In anticipation of moving vehicle engineering to our new HQ in San Jose, we are ramping down and will close our Rochester Hills office near Detroit. Good communication, tightly knit engineering and a common company culture are of paramount importance as Tesla grows.” Good communication. Common company culture. Right.
The San Jose Mercury reports that the credit and stock market meltdowns have finally taken their toll on Tesla’s plucky startup plans. No sooner had the ink dried on its deal with San Jose to build a giant headquarters and production facility then everything went to shit (i.e. got put on hold thanks to the dry-up in venture capital). The Model S Sedan (formerly Whitestar) is in development Hell, Tesla’s Michigan engineering facility has been closed and an undisclosed number of employees have been laid off. But cuts and delays are just the start of the shake-up. Tesla Chairman Elon Musk has installed himself as CEO of the firm, ousting Ze’ev Drori, the second such ouster since Musk booted Tesla founder Martin Eberhart last year. Owen Thomas of Valleywag thinks this news could be more dangerous for Tesla than any credit market issues.
Note to Silicon Valley automotive start-ups: include a “shut the Hell up for the rest of your life” clause in your employment contracts and hire a couple of razor-toothed lawyers to enforce it. To wit: diss-missed Tesla Motors’ founder Martin Eberhard has been blabbing on his “Founder’s Blog” recently, and you couldn’t ask for a worse “champion” for the company’s 100 grand-plus Roadster. “Soon after I got my car, I noticed a funny thing: the ESS coolant pump seems to run all the time. Even when the car is off. Even if it has been off for a long time. Even when the car is plenty cool. You can hear it run, and many people have commented about the noise of the pump and the noise of coolant gurgling into the overflow reservoir. The Tesla people tell me that when the battery is half-way discharged, and the car is off, and the ESS is cool, then the pump will shut off. Fine. But my average daily drive is less than 60 miles, and I have only driven far enough to drain half the battery 4 times since I got my car three months ago. So, except a few hours on these four occasions, this poor pump has been running 24 hours per day, 7 days a week for three months solid… Here is the kicker: 22 percent of the energy consumed by my car happens while my car is parked! Twenty two percent. Imagine that.” Easy enough. And I get the implications for battery and pump life. We’ve long maintained that Tesla is long on hype, short on engineering. What I don’t understand is why anyone would put Gulf racing colors on an EV. Post-modern irony?
As much as I’d like to join the rest of the autoblogosphere and simply repeat the news that Tesla’s about to terminate 100 employees and maybe their CEO (named after an Isaac Asimov character) and then say “I told you so,” I can’t. As far as I can tell, it’s nothing but a rumor. I’ve managed to trace back the report to Jalopnik, that links to a tiny item on the affiliated Valleywag website. “In our inbox, rumor of a staggering blow to one of Silicon Valley’s new growth industries: Tesla Motors, a tipster tells us, is laying off 100 people, about half of its staff. CEO Ze’ev Drori is also leaving, he claims.” The fact that Tesla hasn’t moved to squash this report, which has already circled the globe, shows that either it’s true or untrue (and someone at Tesla really needs to set a Google alert). I’ll go out on a limb and call bullshit. As long as Tesla has such a high media profile, this PR scam conmpany has a lot more mileage left in it. For which the Lord has made us truly grateful.
What if you built an Elise-based, lithium-ion powered, re-bodied Lotus Elise and loads of people wanted to buy one but you couldn’t actually build the God damn things? At least not in enough quantity to make a profit. What would you do? Meanwhile, Tesla continues to hype its Roadster, hoping that its production problems will continue to be seen as “exclusivity.” The Seattle Times does its part to keep the dream alive, hyping the arrival of the Roadster into the great Northwest. “The company is bringing at least one of its Roadsters to Seattle for the first time this weekend for private events with several dozen buyers, many of whom paid huge deposits years ago to help the company get rolling and secure the earliest cars.” When the wait becomes “years,” you know Tesla’s got trouble. By the same token, “They’ll still have to wait months or more [our italics] to take delivery of the $109,000 cars, which only began regular production in March.” Only seven months ago, eh? Anyway, Tesla’s talking about a Seattle showroom and Microsoft’s million and billionaires are all over this thing. In theory. As a PC user, I find that deeply worrying. [thanks to Ryan for the link]
Honest-to-God, I couldn’t care less what Megan Fox drives. All I know is that she’s an actress playing a car savvy babe, not a car savvy babe. To wit: “We still drive an SUV but we’re gonna get rid of it,” Ms. Fox told green gossip site Ecorazzi. “Tesla’s coming with some of these little electric cars that I want to get as soon as they’re out.” Cute? Little? Ecorazzi? Doesn’t that sound like an unforunate combination of “eco” and “Nazi?” Hey! Did you know they’re going to make another Transformers movie? I know. Why bother right? ‘Cause Megan needs money to buy that cute little what’s it called again? Taster? Taser? Who knows? Anyway, your money’s no good at Tesla, Megan. And therein lies the tale.
Recent Comments