By on February 26, 2009

Gawker reports that Tesla spinmeister Daryl Siry left the Silicon Valley startup because CEO Elon Musk (above) was pushing to accept deposits on the Model S sedan. The Model S (a.k.a. WhiteStar) exists only as a prototype. Tesla has no factory or financing with which to build it. When Musk announced that the DOE would approve Tesla’s loan application (they haven’t and likely won’t) and decided to accept $40K Model S deposits (next month), Siry smelled fraud and bailed. Valleywag calls Musk “The New Preston Tucker,” revealing that Musk told a recent Tesla “town hall” meeting that Tesla deposits were not guaranteed. This despite earlier assurances that Musk would personally guarantee deposits. With reports of Tesla asking for up to $75K in unescrowed “reservation payments,” and difficulty reclaiming deposits as small as $5K, Siry’s fears were probably well-founded. Meanwhile, anecdotal evidence from Tesla forums indicates that the real winner here: the Fisker Karma.

Get the latest TTAC e-Newsletter!

Recommended

32 Comments on “Siry Departed Tesla On Deposit Fraud Fears...”


  • avatar
    Cicero

    Tesla is starting to smell more and more like zzzBest.

  • avatar
    Stein X Leikanger

    Maybe Mr Musk will offer trips to Mars to Tesla depositors?

  • avatar
    ZoomZoom

    They’d better be one-way tickets. I think a round trip to/from Mars would be a 36 month journey; you’d still arrive home well before the expiration of any statute of limitations.

  • avatar
    CarnotCycle

    Tesla is too much of a political darling to get the axe. Mr. Musk has secured government suckles via SpaceX, is in the Pelosi-bordering Silicone Valley, and his vaporwarez tie in nicely with the global warming fad. Celebrity airheads a’la George Clooney can be counted on to step up to the plate for Elon, at least when he’s not emoting to Uncle Barry about the plight in Darfur.

    He will get his loan after the standard application process fails, and then some phone calls are made. Mr. Musk has the experience via SpaceX of getting government checks, he’s plugged in to that social mechanism. The opportunities for pork here are truly endless given the nature of his ethereal widgets.

  • avatar
    Redbarchetta

    And why isn’t there a Tesla Deathwatch. THis start-up scam is going to die and we all know it. Unless they get folded into American-Leyland.

  • avatar
    montgomery burns

    Cicero :

    zzzBest! That’s a blast from the past.

    I’m going to have to give Tesla a speck of respect, I never thought they would deliver car #1. But this really does have the smell of desperation the Tucker analogy is a good one. I have (want) to believe that Preston wasn’t out to defraud but who knows for sure.

  • avatar
    tesla deathwatcher

    Does seem likely that Elon Musk will get the loans he’s looking for. Of course Tesla does not have a viable business plan. Who in carmaking does?

    The Department of Energy has no basis for making good judgments on the viability issue anyway. They are under pressure to get the funds out the door, and they will — to Tesla.

    The Fisker Karma is a nice-looking car, in prototype and on paper. But Fisker is a long, long way from putting those cars on the road. Say what you will about Tesla, but they have cars on the road now that work.

    As for Darryl Siry, I suspect there were many reasons why he left. Elon Musk is very talented. He has built several successful companies. But he drives away other talented people.

    I’m just surprised that Siry lasted as long as he did. Whatever the cited reason, I’ll bet the real reason is personal friction with Musk.

    [There was a Tesla Deathwatch here, but it was ended after complaints that there were too many deathwatches.]

  • avatar
    210delray

    Silicone Valley? Freudian slip?

  • avatar
    JT

    @ tesla deathwatcher: “Say what you will about Tesla, but they have cars on the road now that work.”

    I read in other publications that Tesla claims to have 150 cars on the road.

    I ask: where are they, and why have we seen exactly zero documented and instrumented road tests by those known for doing it well?

  • avatar
    Edward Niedermeyer

    210delray: Indeed. And not for the first time, either. Focus Niedermeyer!

  • avatar
    tesla deathwatcher

    Most of the Tesla Roadsters seem to be here in California. I live in Silicon(e) Valley, but have never seen one. Others have seen them in the wild. One even got smashed up in San Francisco last July. http://blog.wired.com/cars/2008/07/worlds-first-fo.html

    A few proud Roadster owners have described their experiences with their cars. Jason Calacanis is the most vocal. Why he has not yet lent his Roadster to Farago for testing I don’t know.

  • avatar
    bunkie

    SpaceX had its first successful launch of the Falcon 1 a couple of months back. That’s no small achievement. But I believe that building a new launch vehicle from scratch is probably easier than building a new car company, never mind one that’s producing electric cars.

  • avatar
    Pch101

    Silicone Valley? Freudian slip?

    Hey, I like cleavage. Doesn’t everyone?

  • avatar
    ihatetrees

    Hey, I like cleavage. Doesn’t everyone?

    You bet! RF needs to make his yearly sojoun over to downblouseamateur dot com for some content…

  • avatar
    RetardedSparks

    “I think a round trip to/from Mars would be a 36 month journey; you’d still arrive home well before the expiration of any statute of limitations.”

    Hell, you’d arrive home before your car was delivered!

    This is a total ponzi scheme (time for “Carponzi Watch”?). They deliver a few cars to make the scheme plausible, use new customer’s deposits to built previous customer’s cars, and hope a bunch more suckers pony up later…

  • avatar
    tesla deathwatcher

    I’m no fan of Tesla, but they are far from a Ponzi scheme. Tesla raised $195 million from some of the biggest names in Silicon Valley. That’s what they used to design and build the Tesla Roadster. Not customer money.

    That being said, don’t count on getting your car or, alternatively, getting your deposit being refunded if Tesla fails to get the $400 million in government loans. I don’t see the company being able to continue in that case.

  • avatar
    guyincognito

    As skeptical as I am about Tesla’s claims, I have absolutely no doubt they will get the $350M loan. I do doubt that it will be enough to actually build an all electric sedan with more than 40 miles range, which is reliable and profitable at ~$60K. In other words, look for them to get at least a few billion.

  • avatar
    RetardedSparks

    Not everybody starts out trying to make a ponzi scheme (well, OK, some probably do) but I imagine many find themselves in that position when things start to go wrong.

    I would venture even Madoff didn’t intend to start bilking people way back when. But his ego probably led to him cover up a few bad bets, then it snowballed. He kept at it figuring sooner or later his ship would come in and he’d get back to even. Never happened. Rarely does.

    Tesla has burned through any credibility beyond a bunch of SV geeks who built an electric car. They wildly underestimated what it took to start a car company, and I’m sure underestimated the money it would take. When the $200m disappeared down a rat hole their egos prevented them from fessing up. They had all those deposits after all. So they finally delivered a few cars, then unilaterally changed the pricing deal on existing orders to help margins, and when that still didn’t work decided to start soliciting deposits on a car they had no way to build if they wanted to…

    The DOE $400m will be gone as fast as their seed capital. Even if they get it, it’s all over but the end game.

  • avatar
    akear

    It is time to create a cool mock up before the next major car show. They could build the underbody from parts from HomeDepot.

    At least the Volt exists. The tesla is just an vision in its owners mind. In that case potential telsa owners can go to bed tonight and dream about driving one. At least that kind of dream is free.

    Nasa will have already been to the moon again by the time tesla is a viable company.

  • avatar
    tankd0g

    The Tesla Roadster exists only as a constantly evolving prototype, and they sent those to production!

  • avatar
    tesla deathwatcher

    At least the Volt exists. The tesla is just an vision in its owners mind.

    I never thought I’d be defending Tesla. But it’s the other way around. The Volt is still being developed. The Tesla Roadster is the car that is on the roads.

    And Tesla is not a Ponzi scheme, and never has been. Tesla has been upfront about their finances. Anyone who loses a deposit with Tesla has only themselves to blame.

  • avatar
    tankd0g

    “tesla deathwatcher :
    February 26th, 2009 at 4:25 pm

    I’m no fan of Tesla, but they are far from a Ponzi scheme. Tesla raised $195 million from some of the biggest names in Silicon Valley. That’s what they used to design and build the Tesla Roadster. Not customer money.”

    So you are saying all that deposit money is sitting in an account somewhere untouched? I call bullshit.

  • avatar
    tankd0g

    tesla deathwatcher: By that logic, GM could just start selling their hand built prototypes and call the car delivered, putting a different transmission here or battery pack there until they get it right to that one lucky customer.

  • avatar
    tesla deathwatcher

    I don’t know how much Tesla got from customers as deposits. But I suspect that it is no higher than $20 million and no lower than $5 million. Not an insignificant amount. But still 10% or less of total funding.

    Some of that money has now become earned revenue too, as Tesla has delivered $15 million worth of cars so far. That’s why I say that Tesla investors paid to design and build the Tesla Roadster. That $195 million is now gone, but at least Tesla spent it on what it promised to deliver.

    As to Tesla delivering prototypes, I disagree. The Tesla Roadster is built by Lotus based on the Lotus Elise. Tesla has no factories — it makes none of the parts itself. Tesla does do final assembly in the US, but that is light manufacturing. I can’t see how Tesla can be accused of making and delivering prototypes.

    Tesla did have problems with the transmission, since the instant-on torque of an electric motor strains a transmission built for a gasoline car. But Tesla claims to have sorted that. It’s certainly not the kind of problem that shows a fraudulent intent.

    Again, I’m no fan of Tesla or Elon Musk. But I see no fraud here. And Tesla is delivering Roadsters that work. Give them that much credit.

  • avatar
    tankd0g

    Perhaps you missed the constantly changing specs on the as yet to be delivered cars being billed as “upsell” items. That’s prototyping by any definition.

  • avatar
    guyincognito

    You know, having thought about this, I have to call shenanigans. Siry had no problem propping Tesla up when they were taking deposits for the roadster that they have absolutely no hope of ever filling without that DOE loan or taking more deposits. A PR guy with a conscience? Please. This sounds like Siry pumping himself up to me.

  • avatar
    akear

    In a decade Tesla will be gone. By that time maybe you will see the occasional Volt on the highway.
    The drama behind the Tesla is more interesting than the car itself.

  • avatar
    DanM

    Lest everyone forget the original article and just argue about the comments, let’s not forget that Mr Siry has not confirmed any of the statements allegedly from him… and the author is notoriously anti-tesla (both Gawker & TTAC).

    Tesla is delivering cars; slow and late, but with a genuine determination. I know quite a few folks there, and there is no question that it it not a ponzi scheme. A risky bet — certainly, but not fraudulent.

    Tesla’s delivered more EV’s this year than anyone except golf-cart makers, let’s give them the benefit of the doubt (or at least hope for their success).

    BTW: global warming is the greatest fraud ever invented.

    Dan.

  • avatar
    Edward Niedermeyer

    It’s pretty well understood that Roaster customers were investors. As Tesla Deathwatcher points out, Tesla has no factory or production capacity. Since Roadster production was to take place at Hethel from day one there was no question of deposits on Roadsters being used to create production infrastructure.

    The Type S is a different story. Tesla doesn’t have some manufacturer lined up to build this thing. They need a factory. If Musk was planning to play the Type S project the way the Roadster was, Siry was right to get out while he could. Completely different vehicles, strategies and capital needs.

  • avatar
    Areitu

    There’s a Best and Brightest who has taken delivery from the Los Angeles dealership/retailer and has, in another thread, offered to show his car and give rides (don’t remember if he also said “drive”) to journalists and bloggers. There’s also been a sighting by my significant other of a Tesla driving about on the 101.

  • avatar
    fallout11

    Lest I remind you guys that Preston Tucker actually built and delivered a handful of prototype vehicles also….right up to the point he went belly up. Tesla has already spent the money paid them for as-yet-undelivered vehicles. As soon as the money in the pipe runs out, the game is over.

  • avatar
    RetardedSparks

    I’m with fallout11.

    It’s a ponzi scheme insofar as NEW customers money is building OLD customers cars. Sooner or later someone, or a few, or dozens of customers will be last in line in with nobody new to fund their cars. Their deposits will be long gone… ask those folks whether or not they think they were victims of fraud.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • SC5door: Fiat build quality for $30K? Pass.
  • SC5door: Only way to get 201 HP is to require premium fuel for the 1.6T. Some Kona owner ran theirs only on premium...
  • Carlson Fan: This is good news. Hopefully it will help flood the market in a few years with used lease return...
  • Tele Vision: Gasoline and its fractions will be around for many years. Diesel makes nearly everything that cars drive...
  • NormSV650: Probably the most miles it will see for the rest of the decade….

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States