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Tech Check
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Tesla |
Trouble is, by trying to reassure investors and a long list of long-waiting customers that everything's OK, he may have done the exact opposite.
Musk, who says he's sunk at least $55 million of his own PayPal bucks into Tesla, tells Reuters today that the company is doing just fine financially, that it expects to close a new round of funding to the tune of $20 million from existing investors "soon," and has $9 million in cash in the bank.
Just $9 million? Ouch. While he meant that factoid to assuage investor concerns that Tesla was on the financial ropes, it's raising lots of eyebrows among the folks I'm talking to, shocked that the company only has $9 million in cash left in the bank. The company has taken an estimated 1,200 orders for its slick, $109,000 electric roadster. And each of those deposits carry a price tag, anywhere from $5,000 to $60,000. I had heard recently that the company had banked as much as $30 million in deposits, on top of the millions it had already raised from a long list of investors.
I'm told Tesla has only delivered 54 cars to customers so far, and with current manufacturing capabilities, can only finish five vehicles a week. At that rate, the last guy on today's wait-list better hope this technology—and the design—stand the test of time. He might be waiting almost 5 years to take delivery of his little baby.
Earlier this month, the company failed to lock up a new round of financing to the tune of $100 million and was forced to lay off a quarter of its workforce and dramatically scale back production, delaying the roll-out of its highly anticipated electric sedan. The company still holds out hope for a new round, on the order of $200 million, from the US Department of Energy. Musk calls the concern of "no money in the bank" "a bit silly," but those I'm talking to suggest that thinking $9 million is enough cash on hand to keep this company going—and growing—is the silly part.
Meantime, the longer this Silicon Valley upstart waits, and delays, and suffers, the more traction its far bigger competitors—including General Motors [GM Loading... ()], Nissan[NSANY Loading... ()] and even Chinese battery maker BYD Co. Ltd.—gain in the marketplace. And any competitive edge the nimble Tesla hoped to exploit seems to be evaporating, even as CEO Musk tries to make an argument otherwise.
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