Tesla Dead?

MaxPower November 3rd, 2008

We have seen this story before (see above).

It appear Tesla Motors, the brightest hope of Silicon Valley’s nascent clean-automotive industry, has only $9 million in the bank, says ValleyWag.

The company, which recently laid off dozens of employees and announced the closing of its Detroit office, called an all-hands meeting yesterday evening to inform employees of its financial state. What makes the company’s low cash balance especially scary, our tipster says, is that the company has taken “multiple tens of millions” of dollars in deposits from customers — anywhere from $5,000 to $60,000 per vehicle — and has only delivered 50 of them (out of 1200). The obvious conclusion: Having already spent its customers’ deposits, it may run out of money before it delivers the cars they have paid for.

The Tesla CEO Elon Musk then admitted that they only have $9 mil left. However, he notes, importantly that cash on hand does not equal liquidity and that they are looking for a new infusion of $20 million. In today’s market environment, one doesn’t want to be raising cash right now. Ugly.

  • Ya, I’ve been fallowing the Tesla Death Watch on the site, The Truth About Cars. They are currently on Death Watch 33, in which they talk about about Tesla saying “its cutting one fifth of its UK workforce”.

    My guess is that the Death Watch won’t crack 50. There is just no more money and no more time for Tesla.

  • That is an interesting site, never seen it before.

    Tesla *could* be bought and rolled into another company. With all the hullabaloo going on with potential GM/Chrysler merger it could happen.

    Wouldn’t count on it though. Not in today’s environment.

  • It’s a great site to have on yee ‘ol RSS reader. ;o)

  • This just in: Tesla Death Watch #34 – Additional Funding Received

    From Reuters:

    Tesla Motors Inc said on Monday that its board had approved $40 million in convertible debt financing to push ahead with stepped-up manufacturing of its battery-powered Roadster sports car.

    Looks like the board at Tesla isn’t ready to drop just yet. Btw, is it just me or did I read somewhere that Matt Damon drives a Tesla? Totally random question there…

  • Ha well there you go. This post is now old. Old news is old.

    Again, surprising given today’s news that “U.S. auto sales plummeted 32 percent in October to the lowest monthly total since January 1991” and not just American cars, Toyota Motor Corp.’s declined 23 percent, Honda Motor Co.’s slid 25 percent and Nissan Motor Co.’s were down 33 percent.