BREAKING: Changes coming at Tesla, Musk to be CEO, Drori to Vice Chairman
by Sam Abuelsamid on Oct 15th 2008 at 4:20PM 
Changes are afoot at Tesla Motors as the reality of running a carmaker takes hold in San Carlos. When we got wind of a story on Valleywag this morning about layoffs and executive changes at Tesla, our first call was to SVP Marketing Darryl Siry. Not surprisingly Siry told us that Valleywag was less than totally accurate. There are are indeed some lay-offs happening at Tesla as well as changes among the executive staff. Chairman and chief architect Elon Musk will be taking a more hands on role as he takes over the position of CEO from Ze'ev Drori. That makes Musk the fourth CEO of Tesla in one year. Drori will get the title of Vice Chairman. As for the layoffs, there are some although we are still awaiting details. Siry has promised an update this morning and as soon as it's ready we'll let you know.
Update 3:30PM EST: Tesla has yet to release details of the changes and hasn't commented yet on our latest question. Tesla had been planning either an IPO or debt issue by early 2009 to raise funds that would be used to pay for the development of the Model S sedan and the factory to build it. Given the recent upheavals (or should that be downheavals?) in the capital markets, the chances of Tesla raising any more cash right now seem slim to none. In light of that, layoffs among the staff and delays to the program seem inevitable.
Update 4pm: Tesla has just published a blog post outlining what is going on and as suspected it is partially due to the financial market issues that have been going on. Musk is stepping in to take over day to day control of the company from Drori. In addition, for the near term, Tesla is going to focus on Roadster production and powertrain sales in order to generate some revenue and try to get cash flow positive in the next 6-9 months. That means that development work on the Model S is being scaled back for now and the Auburn Hills MI engineering office will be shut down. An indeterminate number of lay offs will also occur. Model S work will be consolidated in California and ramp back up again after the company gets approval for a low cost DOE loan. That will only happen after they get environmental approval for the new San Jose headquarters site, expected in Q2 2009. Model S production has now been pushed back to at least mid 2011.
[Source: Tesla Motors]
Reader Comments (Page 1 of 1)
EVan 10:37AM (10/15/2008)
Elon has done wonders with the SpaceX company, hopefully that can translate effectively to Tesla as well.
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EVan 7:11PM (10/15/2008)
Tesla's Michigan design center is in Rochester Hills, not Auburn Hills. Sheesh.
kert 11:21AM (10/15/2008)
Not exactly wonders with SpaceX as they are years behind their original schedule and claims, but well done nonetheless. With the first successful launch under their belt, i guess Musk can concentrate now more on running his other company.
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John T 11:43AM (10/15/2008)
We have no idea if Elon can run a company guys. Look, he may, or he may not. Hitting it big on one dot.com company does not make you a genius. He MAY have been lucky. He MAY have been really good. I don't know and neither do any of the rest of you. I want to see them succeed and see Tesla and this entire industry grow wildly.
When a guy shows he can build, turnaround, fix, etc a number of companies then you know he's the real deal. At this point, he may have been a guy who "bought the lucky lotto ticket" at PayPal and can't do it again? Who knows.
It looks a little scary over there right now. You can claim the first problems/issues were Martin, you can blame the delays and false starts since on Drori. But the one common thread since things started getting dicey has always been Musk.
Of course, building a car company is really, really hard work. Maybe nobody is to "blame". Maybe it's going to be like this for a while no matter what they do?
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realistic_idealist 3:22PM (10/15/2008)
It is all because Musk is getting divorced and taking it out on his employees...
Typical.
His wife's blog:
http://moschus.livejournal.com/102961.html
"What goes around, comes around."
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Throwback 3:38PM (10/15/2008)
The car business is a tough slog in good times. Tesla is going through what every new car company has gone through, they are just the latest. I would not be shocked to see them absorbed into a bigger automaker. Reanult comes immediately to mind.
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tankd0g 6:08PM (10/15/2008)
Lotus comes to mind. Maybe they'd pick up the pace on building the cars if it was their name on them...
dublindog 6:57PM (10/15/2008)
Opportunity squandered – hopefully some people with humility, experience in actual product development and an acceptance of reality can make data driven decisions that ultimately bring reliable fully functioning “no excuses” electric cars to market. Brand building is nice, PR is necessary – but where's the beef? Not in San Carlos…what is the name of that Tesla death march site?
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IQ 5:44PM (10/20/2008)
business is business. you gotta do what you gotta to do to keep the company going. I suspect that the economy should be back on track by the middle of the next year, and then they will re-start the model s project. businesses just have to hold on tight until everything gets better.
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BlackbirdHighway 4:36AM (10/16/2008)
Just about every car maker on the planet is cutting back. Tesla makes cars and it is cutting back.
The change of CEO is news, but layoffs and delaying spending on new car development is the same thing we've been seeing from all the rest of the automakers for at least a year.
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JDred 8:27AM (10/16/2008)
Hmmmm. Sounds a lot like Apple during the late 80's and early 90's. Jobs and Wozniak had a great ideas and no ideas on how to run a business.
Too many ideals and expectations were put out ahead of the actual and available product. And in today's poor economy, a 100K car isn't going to sell to anyone, no matter what advantages it has.
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jim 10:42AM (10/16/2008)
Within 18 months Telsa will be bought out by an existing auto manufacturer for the techonolgy
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the watcher 3:43PM (10/20/2008)
60+ people got axed last thursday.
30 contract / 30 fulltime.
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Michael 9:38AM (10/22/2008)
The changes are encouraging; a sign that reality is not being ignored and that dreams are not at the helm.
I won't be cancelling my order.
MPT
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