|
CNBC'S MOST SHARED
- WPP's Sir Martin Sorrell on the Ad Recession
- Warren Buffett's Complete Sun Valley CNBC Interview - Transcript and Video
- Preparing for Retirement
- Software Giants Rush to Cash In on Carbon Counting
- The View From Newark
- Investing in Tech Now
- Maria's Market Message
- Warren Buffett Tells CNBC Consumer Sales Remain "Very, Very Soft"
- China Demands Currency Reform, France Backs Debate
- Obama Struggles With His Healthcare Overhaul
- GM CEO Vows Leaner and Better Company To Emerge
- World Has Avoided Economic Disaster, Obama Says
- Farrell: Let's Enjoy the Numbers for a Moment
- Social Networking's 'Naked' Truth
- Geithner Seeks Clampdown on Derivatives Dealers
- A Muscle Car to the Rescue for General Motors
- Recession Special: Steak for $5!
- UBS Can't Comply with US Request: Internal Memo
- One-on-One With UFC's Dana White
- Improving Morale Vital to Success and Survival
- Global Stimulus: Boosting Water Stocks
- Warren Buffett's Top Three Investment Rules for the Average American
- Schork Oil Outlook: It’s Now or Never for the Bulls
- Social Networking's 'Naked' Truth
- Farrell: Let's Enjoy the Numbers for a Moment
- Call Of Shame - Vote Now
- Schmidt on Social Media, Ads and Hulu
![]() |
Tesla Motors, an electric car start-up in Silicon Valley, said Wednesday that it would lay off employees and delay production of its second car, the Model S. Tesla also removed its chief executive, Ze’ev Drori, and appointed Elon Musk, the company’s chairman and principal investor, to the position.
Mr. Musk posted the changes on Tesla’s Web site. He said the company was in a “critical phase” and would have a positive cash flow within nine months.
He blamed the worsening financial crisis and the credit crisis for the upheaval. “It’s not an understatement to say that nearly every business will be impacted by what has unfolded in the past weeks,” Mr. Musk wrote. The cutbacks come after warnings from Silicon Valley venture capitalists that start-ups should slash expenses and reach profitability as quickly as possible to survive the economic downturn.
![]() |
Tesla Motors Tesla Motors |
Mr. Drori, who was the chief executive since November, will remain at Tesla as vice chairman. He replaced Tesla’s former chief, Martin Eberhard, a co-founder, who was ousted in August 2007. Mr. Musk is the fourth chief executive since the company was founded in 2003.
Mr. Musk and Mr. Drori declined interview requests. The company does not know how many of its 250 employees will be laid off, said Rachel Konrad, a company spokeswoman. Tesla, based in San Carlos, Calif., will close its office near Detroit.
The Model S, which is intended to travel 200 miles on a single charge of its lithium-ion battery pack, is expected to sell for around $60,000. It’s introduction will now be delayed from 2010 to mid-2011, six months after General Motors [GM
Loading...
()
] is expected to offer its electric Chevrolet Volt.
In September, Tesla announced that it would lease 89 acres in San Jose to build a headquarters and factory.
Tesla is trying to raise $100 million to add to the $146 million it has already raised. Backers include Mr. Musk, who made his fortune as a co-founder of PayPal; Jeff Skoll, former president of eBay [EBAY
Loading...
()
]; and Larry Page and Sergey Brin, co-founders of Google [GOOG
Loading...
()
]. Tesla is also waiting for a low-interest loan from the Energy Department, which the company cannot use until it passes an environmental review.
In the meantime, Mr. Musk said, Tesla will focus its efforts on making the Roadster, which has a one-year waiting list. It will also increase power-train sales to other car companies, a business that Mr. Musk said was profitable.
“We are not far from being cash-flow-positive, but, even if that threshold ends up being further than expected, I will do whatever is needed to ensure that Tesla has more than sufficient capital to get there,” he said.










