Tesla Motors Faces Financial Crunch

Automobile Staff
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Tesla Roadster

Large domestic automakers aren't the only ones hard-pressed for cash.; Electric-car specialist Tesla Motors, based in Silicon Valley, California, announced yesterday that it is also running low on funding.

Though the firm had raised over $100 million from various investors, the company is facing a series of measures designed to, as a Tesla release stated, "be cash-flow positive within six to nine months." While part of that plan surrounds ramping up production of the Lotus-sourced Roadster EV (only fifty have been delivered to date), the liquidity issue complicates many other aspects of the firm's existence.; Plans for a second model, a sedan named the Model S, are now officially on indefinite hold.; That also jeopardizes the construction of a $250 million factory in Silicon Valley, which was to build the Model S. A number of job cuts are also in the pipeline, although the exact figure is still up in the air.; Early reports indicated that up to half of Tesla's staff of 200 could be eliminated, but Tesla's declined to give a hard figure.; Certainly, those employed in Tesla's engineering offices in Auburn Hills, Michigan, which will close as part of the restructuring, may be a significant portion of that figure. In addition, Elon Musk - perhaps Tesla's biggest investor - is now being appointed as CEO, while Ze'ev Drori will be appointed as the company's vice chairman. Source: Automotive News

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