Elon Musk discusses the state of affairs at Tesla
Tesla Motors may well build the most desirable electric car of all time, but that doesn't make the company immune the same economic realities as every other automaker. Last week, Tesla CEO delivered a keynote address at the Society of Automotive Analysts "Outlook 2009" conference that took place during the press previews for the Detroit Auto Show. In the last few months, Tesla has had to abandon plans for a public stock offering as well as an additional private fund raising round.
Before the speech, Musk sat down to talk at some length about the current state of the business. He did acknowledge that new orders have slowed down recently while some existing orders have been canceled. Musk declined to be specific about numbers but did acknowledge that the overall economic environment has affected some customer's ability to complete their orders.
Musk also discussed the battery supply deal with Daimler and indicated that he would like to see more OEM deals in the future. The bottom line is that even with the added revenue from increased Roadster deliveries and option price increases, Tesla is likely to have a very difficult time going forward unless the economy makes a dramatic turnaround in the next six months.
[Source: Green Fuels Forecast]
Reader Comments (Page 1 of 1)
RPM 7:53PM (1/22/2009)
"...Tesla is likely to have a very difficult time going forward unless the economy makes a dramatic turnaround in the next six months."
With the Dems in control fat chance that will ever happen..just look at the past 2 years and where the Dems got us. Now BO is taking further steps to ensure the economy continues to plunge. I hope I'm wrong I truly do...but you just cant ignore history that illustrates time and time again how much of a failure this will be.
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meme 8:10PM (1/22/2009)
"With the Dems in control fat chance that will ever happen..just look at the past 2 years and where the Dems got us. "
LOL. That's pretty darned funny. FYI, the congress was 50 Democrats, 49 Republicans, and Joe Lieberman. And it became a working rule that you needed 60 votes to pass legislation because of Republican "pocket filibusters" (something Reid agreed to, which has earned him the scorn of many Dems -- if they want to filibuster, make them stand up and read the phone book or cite Hamlet, for crying out loud; don't just give them whatever they want on *every issue* simply because of a threat!). And beyond the 60 vote requirement, there was a Republican president. And a Republican cabinet. And a Republican Supreme Court. And a majority of Republican governors and Republican houses of legislature. Following 6 years of Republican rule at a national level.
And everything that's happened is the Democrats' fault! Oh, I love it, it's so rich!
For economic performance of earlier presidents, here's a list of various metrics:
http://www.huppi.com/kangaroo/6Economy.htm
Beyond that point, we have Clinton, who left office way up in all metrics, and Bush, who broke records for awful economic performance.
RPM 8:49PM (1/22/2009)
Meme..to your point I do agree partly..The Republicans also let the country down to some extent..and I don't agree with everything they have done in the past few years...also blame should fall on the people..we spend like no tomorrow and overextend ourselves..then sit back all surprised when it comes tumbling down like a deck of cards. No one put a gun to peoples heads and made them sign up for home loans they could not possibly afford.
But now there seems to be very little in the way to prevent a further plunge into an economic mess.
Lad 3:14PM (1/23/2009)
It would be great to see people stop with the blame game and start offering productive ideas to help us solve our nation's problems. We must be driven by the desire to do better in the future. There is nothing we can do about what has happened in the past but record it for history!
RPM 7:09PM (1/23/2009)
"..There is nothing we can do about what has happened in the past but record it for history!"
It is good to record history...but even better ..we can learn from history !
jharlan 8:26PM (1/22/2009)
No MEME, what has happened up to now is all Bushes fault, right? Everything that happens from now on will be the demoncrats fault.
Now is not the time for the obstructionist partisan policies the opposition used for most of 8 years. We need to give these guys a chance to pull us together. BO just might be the guy that can pull it off. Once in a lifetime a true statesman arises that can inspire a society to greatness. God I hope BO is that guy!
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Jharlan 8:35PM (1/22/2009)
It kind of looks like Elon Musk thinks Tesla is in trouble. How many of those canceled orders were because he tried to chisel people who had already put down the deposit? He failed to mention that he has proven he is very willing to use unethical business practices, and the people that noticed can't seem to get away from him fast enough.
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realistic_idealist 4:28PM (1/23/2009)
uh hmm... ha ha... *sigh*
MUSK STRIKES AGAIN!
Today's lesson: History Repeats Itself.
-It's ironic that Nikola Tesla's own misleadings with business and entrepreneurial tact would reflect so kindly upon a company bearing his name half a century later.
Don't Quit Your Day Job
-Elon Musk should stick to his physics degree and just keeping shooting things into space, because as everyone knows "what goes up, must come down," and this (ASS)tronomical failure in his part as a businessman displays the realities of why not all of us are fit to lead and how easy it is to destroy the hope of so many (cue Martin's return a-la Steve Jobs post-firing).
And A Personal Opinion
-The Roadster is a proof-of-concept. The company proved they could build it. They should not try to immortalize it as the saving grace of the electric car industry forever remembered by its features and trim-options, but instead move on to a Second Generation Roadster as an up-sale, not that silly Sports version that's a spit-ball faster than the original.
...it's time for someone to register TeslaSucks.com
"Let the future tell the truth, and evaluate each one according to his work and accomplishments. The present is theirs; the future, for which I have really worked, is mine."
-Nikola Tesla
RPM 8:59PM (1/22/2009)
I just do see if this guy is suppose to be such a great business man ..how could he let something like happen?? He honestly thinks that charging $9000 more for a few 100 cars is going to offset the $49,000 per car loss they are accumulating? I'd say he lost more potential sales (and $) from this stupid stunt than he could have ever hoped to recapture from the increase in prices to the locked in buyers.
Better move would have been to raise the price for all future cars sold. And a letter of honest explanation as to why would not have made anyone have animosity toward the company..in fact may have helped to give them positive PR !!
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jake 10:47PM (1/22/2009)
They aren't taking a $49k loss right now. That was back in 2007 before they even had it in production. Right now the loss is a couple thousand, so a rise in $9k WILL cover the costs. Elon isn't stupid, he won't be pushing a product with a $49k loss. He would have jumped shipped a while ago if that was the case.
Unfortunately with all the various reporting it seems the details will get lost (or paraphrased wrong) , but it's important to know them if you want to argue something about them.
RPM 7:13PM (1/23/2009)
If that's true then its even more of a reason to NOT raise price of the current locked in customers...
Yanquetino 11:14PM (1/22/2009)
"Musk declined to be specific about numbers but did acknowledge that the overall economic environment has affected some customer's ability to complete their orders."
Oh, that is sooooooo rich! Leave it to Edison to point the finger elsewhere. How about HIS ability to complete THEIR orders as agreed to with the locked-in options and prices?
Typical. Blame the victim. It would be hilarious if it were not so tragic for those who put down those huge deposits years ago.
The board needs to oust this Chief Executive Offender before he completely undermines the company.
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iPineapple 2:14AM (1/24/2009)
MUSK MUST GO!
MUSK MUST GO!
BRING BACK MARTIN!
BRING BACK MARTIN!
MUSK MUST GO!
MUSK MUST GO!
BRING BACK MARTIN!
BRING BACK MARTIN!
tankd0g 10:33AM (1/23/2009)
I revise my 3 year predicion and put Tesla down as dead or sold to an Asian/Indian interest in 2.
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Congressman Pork-D 11:58AM (1/23/2009)
for those that didn't take basic civics 101, the purse strings are controlled by CONGRESS. The house sets the agenda and then the Senate fine tunes it. The president has some input but is really at the mercy of Congress unless he wants to shut down the government by not signing the budget. Congress has been controlled by the Dems. Many of the laws that caused this current meltdown was initiated and nurtured along by Dems such as Barney "Fannie Lover" Frank and Chris "Sexual Harasser" Dodd. Bush Admin tried to rein in these dangerous laws that made it a priority to give money to those that couldn't afford paying it back. The damage has been done but now the problem is that congress is throwing good money after bad and Obama is going along with it because that's the Socialist way to try and spend one's way out of a recession. It's never worked and it won't now. Unless a miracle happens, Tesla is Toast.
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Chris M 2:53AM (1/24/2009)
Childish name calling? Sounds like you've been listening to too many right-wing pundits.
Bush jr. could have vetoed any bill he didn't like, but for 6 years of Republican dominance he didn't veto a thing. Not even when the Republican congress deregulated the banks, which allowed the banks to make the kinds of high risk loans that got us into the current mess. When Democrats got into power in 2006, Bush did veto a few bills, and the Dems didn't have enough votes to override the vetos. But of course, the right-wing pundits wants to shift all the blame.
There was NEVER any law requiring banks to make bad loans, that's yet another whacky right-wing myth. There were laws prohibiting discrimination in lending on the basis of race, religion, gender, national origin, or neighborhood, those laws date back to the Carter administration and none of the subsequent Republican administrations even considered repealing any of them. Note, however, that those laws makes no mention of "Income" or "Credit rating" or "Criminal record", banks could indeed refuse to issue loans to anyone that was unable or unlikely to pay it back, and the laws specifically recommended that the banks use "sound lending practices". We know that's true because several banks didn't make bad loans and are still in good financial shape.
Ah, but when some conniving bankers realized that they could make a lot more money with the marginal high interest loans and questionable lending practices that the Republican banking deregulation allowed, they went for it, figuring that with ever-rising real estate values, they'd make a fortune even if the loan defaulted and they had to take back the property. Borrowers went for "no downpayment" and "interest only" and even "negative amortization" loans, figuring that with ever-rising real estate values, they could sell out after a few years, pay off the remainder and pocket the rest. Of course, when real estate stopped rising and prices slumped a bit, then those holding "no down negative" loans panicked and bailed out, forcing forclosures and driving real estate values down even more, causing even more to bail out. The over-inflated real estate values dropped back to realistic values, but that wiped out the home equity for lots of homeowners, and the banks ended up with property worth far less than the defaulted loan amount.
But of course the dittoheads can't admit their beloved Republicans engineered that cockup, so now they are busy shifting the blame.