Category: Tesla Death Watch

By on February 13, 2009

It can be so hard to tell when the firm’s CEO is so notoriously at odds with reality. So let’s just say that we’re entering Elon Musk’s world, grains of salt available upon request. In fact, the news comes from a Musk email that Jason Calcanis has posted verbatim to his blog (cross posted at Tesla Motors). The main point of the email seems to be to convince the reader that Tesla isn’t about to disappear with the credit market, citing a deal with Daimler to electrify the Smart, a $40m investment round and the near sellout of all 2009 Roadsters. Even better, if you lay out $100k for a Roadster now, you might just have a new cashflow opportunity to get you through the hard times. “Due to our order backlog, it seems that owning a Roadster can be a good investment,” writes Musk. “Last September, as the financial and real estate markets began crashing, a Roadster was sold at the Sonoma Paradiso in California wine country for $160,000, well above the current list price of $109,000.” And if you buy that, I’ve got some mortgage-backed structured invesment vehicles that you might be interested in. But the big news is that Tesla may or may not get funding from the biggest sucker of them all: the US Federal Government. Or not. (Hat Tip: minion444)

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By on January 30, 2009

Tesla has failed to secure the $100m it needed to continue with plans to build a headquarters on San Jose, CA’s Zanker Road, reports the San Jose Business Journal. Tesla had also planned to build a $250m manufacturing facility on the site, which would have assembled the firm’s development hell-bound White Star sedan. “We abandoned that because the VC financing environment became so tight and difficult,” say Tesla spokesfolks. Instead, Tesla has applied for about $400 million in two federal, low-interest loans through the Advanced Technology Vehicle Manufacturing Program. It is seeking $250 million for the Model S manufacturing facility and $150 million for an advanced battery and powertrain facility. But this means that the Zanker Road site can not be used, since the ATVMP funds may only be used to refurbish and retool existing facilities, not build at greenfield sites like Zanker Road. “We’re very optimistic, even with Zanker Road,” said Michelle McGurk, senior policy adviser to San Jose Mayor Chuck Reed. “We know all the reasons Zanker Road made sense, and it still might make sense depending on how things shake out.” Or not. “We can’t afford to do anything that would jeopardize our ability to get the federal loan,” says Tesla spokeswoman Rachel Konrad. She notes that Tesla is looking at other existing sites which might qualify for refurbishing loans. And the march from private to public funding sources for the auto industry continues unabated.

By on January 23, 2009

Tesla Motors recently caused a kerfuffle amongst its earliest and most faithful supporters by raising the price of its Roadster. More precisely, the Silicon Valley automaker turned some of the car’s standard features into options, and then raised the prices on those (e.g. the fast charge power cord). Customers who’d provided Tesla with hefty deposits– up to $50k– were none-too-pleased to discover that their “locked-in price guarantee” wasn’t worth the paper it was printed on. Uh, it was printed, yes? Anyway, to quell the ensuing PR shit-storm, self-appointed (anointed?) Tesla CEO and Product Architect Elon Musk has emailed an explanation to his rapidly aging customers [full text after the jump]. Musk has also scheduled a town hall-style meeting for the 26th and 27th. In short, to ensure federal teat suckling for the WhiteElephant sedan, Tesla has to prove that it’s “viable” (there’s that word again). As Tesla was losing $31k per car, something had to change. In other words, take a hit for the team guys, Oh, and Musk points out that there’s a $7500 tax credit for customers who take delivery of their Roadster between January 2009 and March 2027. Just kidding. I think.

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By on January 19, 2009

By on January 10, 2009

Top Gear presenter and Times carmudgeon Jeremy Clarkson is not one to walk away form a fight. In fact, you could say he never met a fist he didn’t lunge his towards. After Tesla and the MSM knocked Clarkson for pretending that a Roadster ran out of juice in an episode of the shark jumping car show, Clarkson mounted Ye Olde “Valid Yet Undeclared Fictional Recreation of Theoretical Facts” defense. And that, one presumed, was that. Only, of course, it wasn’t. In Clarkson’s Times column, the world’s most famous pistonhead attempts to disprove the English maxim “the first thing you do when you’re in a hole is stop digging.” “Tesla, when contacted by reporters, gave its account of what happened and it was exactly the same as ours. It explained that the brakes had stopped working because of a blown fuse and didn’t question at all our claim that the car would have run out of electricity after 55 miles.” Uh, yes it did. Anyway… “The problem is, though, that really and honestly, the US-made Tesla works only at dinner parties. Tell someone you have one and in minutes you will be having sex. But as a device for moving you and your things around, it is about as much use as a bag of muddy spinach.” Dodgy handling, high price, yada, yada, yada. And the Roadster’s greatest sin? 

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By on December 17, 2008

From “For the record: Thanks to The Stig’s impressive turn behind the wheel, the Tesla Roadster gets a higher ranking in Top Gear’s performance board than a Porsche 911 GT3. Jeremy Clarkson, a die-hard ‘petrol head’ with a clear bias against green cars generally, said that it must be ‘snowing in hell’ because he had such a great time driving the Roadster and now considers himself a “volt head” thanks to the Roadster’s amazing performance. This is amazingly high praise from Clarkson, whose entire schtick is to savage even his most beloved petrol-guzzling sports cars.

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By on December 11, 2008

TTAC’s Best and Brightest have spoken. TTAC has listened. You’ve asked for less negativity and more car passion non-death stuff (to use the technical term). So I’m cancelling the Tesla Death Watch. The Silicon Valley company has delivered its 100th Roadster– or so they say– and, well, how great is that? I still believe Tesla doesn’t have a hope in Hell of staying in business. But it will take a while for that to play out. We’ll continue to cover Tesla as and when the situation merits. But TTAC won’t be hovering over Elon Musk’s minions vulture-like, waiting for the latest insult or injury. I made my point: they’re a company fuelled by tree-hugging hype rather than solid engineering or accountability. Tesla Death Watch out.

By on December 10, 2008

Bloomberg reports that Tesla Motors’ self-appointed CEO Elon Musk is threatening to not build its [theoretical] $57,499 four-door electric vehicle at a $250m San Jose factory if Uncle Sugar doesn’t fork-over $350m from the soon-to-be-depleted (or not) U.S. Department of Energy $25b loan program. This must please CA officials no end, as they risked the wrath of the entire Golden State business community by extending “special” tax credits galore to Tesla to “convince” the EV maker to locate production of their [theoretical] WhiteElephant sedan in The People’s Republic of California. (Hey! Didn’t New Mexico do the same thing? With the same result?) “We can’t move forward with that without a major amount of capital,” Musk told Bloomies. “If we don’t get any government funding then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now.” Or, in Tesla’s case, never. Hang on; $350m? Wasn’t that $400m the last time we looked?

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By on December 1, 2008

Tesla’s hubris knows no bounds. Not only has the Silicon Valley manufacturer of $109k lithium-ion-powered carbon fiber sports cars applied for a $400m federal grant to sustain its oft-delayed and hugely unprofitable quest to “reinvent the automobile,” but they’ve also publicly declared that Detroit’s bailout-seeking beancounters should keep their NSFWing hands off Uncle Sam’s $25b retooling loans. (I’d cut and paste the exact quote from their website, but ten seconds of their white-on-black text is enough to short-circuit my optic nerves). The New York Times fired back, pointing out that taxpayer funds should not subsidize expensive toys. Tesla owner Jason Calacanis retaliated in a fit of “just you wait” pique. “The fact is that Tesla could–right now–produce a car that is 1/3rd to half the price if they set it to go only 100 miles. In nine years, they will easily be able to produce a $40k car that does this. Is nine years too long to wait for this technology to reach the price point that 80% of the new-car-buying country could afford? I don’t think so.” Meanwhile, Toyota has seen the EV’s Li-ion Promised Land, and declared “I may not get there with you.”

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By on November 18, 2008

Whilst reporting that U.S. Treasure Secretary Henry “Hank” Paulson is telling the automakers “keep your hands off my $700b stack, Jack,” Fox News reveals that Ford, GM and Chrysler aren’t the only automakers looking to tap into the $25b Department of Energy “retooling” loan program. Tiny Tesla Motors has sent in its application for $400m worth of no to low-interest loans, so it can build more $109k lithium-ion-powered two-seaters with less luggage space than a diva’s jewel-encrusted clutch bag. I kid. I kid. I think. “General Motors, Chrysler and Tesla Motors Inc. have applied for loans and Ford CEO Alan Mulally said the automaker plans to apply on Tuesday. GM, Chrysler and Ford have not disclosed the amount of funding they’re seeking from the Energy Department or for what purposes. Tesla said it was seeking about $400 million in loans for two projects.” Let’s see.. they make one car (the aforementioned Tesla Roadster) and want to make another (WhiteElephant). Is it me, or is there some sort ofinternational conspiracy to keep TTAC in mill grist? [thanks to MgoBlue for the link]

By on November 17, 2008

We’ve often wondered how many cars Tesla has actually delivered to paying customers. The company claims there are some 60 cars out there, somewhere. Well, thanks to Jason Calacanis’ patience over the last two years, we can now bring you this update: 16. Well, at least 16, as Jason has just taken delivery of Roadster number 16 (says so right on the VIN plate). But wait! That’s number 16 after the “Founders’ Series” of 27 Roadsters. So that would be… 43! But wait! Calacanis says the numbers aren’t delivered sequentially. His is 16, but, ’cause he asked for special paint job, cars with higher VIN numbers may have been delivered earlier. Anyway, after an intro that makes the opening credits of the original Batman series seem like a subliminal message, the 169th edition of TWIT (This Week in Technology) reveals all. Calacanis describes the prototype Tesla four-door as an Aston Martin combined with a Porsche and a Maserati, and says Tesla’s problems are now behind it. Which probably means they’re dead ahead.

By on November 11, 2008

Tesla Motors recently closed it’s Michigan research facility and fired about a quarter of its workforce. The Silicon Valley start-up might be totally broke and searching for Uncle Sam’s teat, too. Let me rephrase that– they may not have enough cash to remain viable AND they’re looking for a federal bailout/hand out. As you also know (maybe, if you care), Henrik Fisker is set to build a hybrid luxury automobile called the Karma. [ED: not a hybrid between a Mercedes SL/BMW and an Aston, as previous.]  Tesla hired Fisker to design their WhiteElephant sedan, After the two decided to part company, Tesla sued Fisker for stealing trade secrets (as if). Fisker won the suit via binding arbitration. They savored the judge’s Tesla tongue-lashing, pocketed a nice chunk of cash for their troubles and publicized the Hell out of the outcome. Long story short, Tesla and Fisker hate each others’ start-up guts. And now Fisker’s announced it’s opening a 34,000-square-foot facility in Pontiac Michigan, good for about 200 employees, where Fisker is planning on building it’s gorgeous four-door Karma hybrid. Fisker says it will offer the Karma in the fourth quarter of 2009. Meanwhile Tesla’s still struggling to produce enough Roadsters to fulfil customers’ deposits. That’s gotta hurt.

By on November 3, 2008

Last week was something of a problem for Tesla Motors. After self-appointed CEO Elon Musk announced cutbacks (i.e. fired a bunch of people and closed their Detroit office), Valleywag (amongst others) reported that the Silicon Valley EV maker was down to its last $9m. For a carmaker, that’s like driving on fumes. Well, it turns out that Tesla had a mole in their midst, who fed the Valleywag website inside info. Which is fair enough. God knows TTAC has its spies friends throughout the industry. And the fact that this grass, Principal Thermal Engineer Peng Zhou was outed within the company, is also no big surprise. But the fact that Elon Musk chose to forward Peng’s mea culpa to everyone in the company [full text after the jump], knowing full well someone would leak THAT, is more than slightly worrying. Then again, discretion is not the better part of fanaticism, egomania and old-fashioned cruelty. Or TTAC’s remit, come to think of it. But then we’re in the muckraking business, not EV manufacture. [thanks to you-know-who-you-are]

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By on November 3, 2008

Reuters reports that Tesla Motors has secured $40m in additional financing from existing investors. The electric sportscar firm had less than $10m in the bank as of a few days ago, but CEO Elon Musk is still convinced that Tesla has nothing to worry about. “Forty million is significantly more than we need,” Musk said in a statement. “However, the board, investors and I felt it was important to have significant cash reserves.” Except that Tesla failed to secure a $100m round of financing just a month ago, triggering the current cash crisis which has claimed a quarter of Tesla’s workforce and all of its development work. And if you aren’t already bearish on Tesla, consider that the latest round of financing comes in the form of convertible debt. This financing option is described here, but the major benefits to Tesla are that it does not have to place a value on the struggling firm (can you say “upside down?”) and it protects early “angel” investors. What we don’t know is what the “trigger” for this convertible debt is, whether it is filling a specific number of orders, reaching certain financial goals, or what. Whatever the trigger is, whenever it happens, the folks who just ponied up $40m better hope Tesla is in much better shape when that debt converts to equity. If the debt ever converts to equity. Ultimately this news is only good for one category of filth people: lawyers. Convertible debt is notorious for requiring near constant legal oversight. Whatever it takes, right?

By on November 1, 2008

Tesla’s heading down the home stretch here on Ye Olde Death Watch. Autocar reports that the Silicon Valley-based EV-maker says its cutting one fifth of its UK workforce. The number of Tesla employees laboring at Lotus’ Hethel factory, where the Tesla Roadster is born, has slipped from 50 to 40, or less. ““We deeply regret the necessity of making redundancies at the Tesla Hethel facility,” said Don Cochrane, UK sales and marketing director at Tesla Motors, who’s still cashing a nice fat paycheck (as far as we know). “It is in the interests of the longer-term health of the company to act prudently now.” Or, perhaps, before. Never mind. Facts never had much currency in Tesla-land, for either the company’s principals or the sycophantic scribes who parroted their PR. For example… “Since the £90,000 Roadster was launched, 125 examples of the groundbreaking electric sports car have been ordered across Europe. All of these are assembled at the Hethel factory at a rate of 40 vehicles per month. Tesla insists this production rate won’t be affected by the staff cutbacks.” Forty a month? Geddowdahere!

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