Tesla Motors: We're not dead yet

A sneak peak at the Model S

(Credit: Tesla Motors)

Tesla Motors announced on Thursday that the Department of Energy was given the green light to disperse $350 million in loans over the next few months to help the all-electric automaker build a new manufacturing plant in San Jose, Calif.

Company chairman Elon Musk applied for the loans when the company was unable to secure private funding, stalling development of the new facility and casting even more doubt upon the ambitious start-up carmaker.

The announcement should help quell the death knell rumors spawned from recent mass layoffs, canceled orders for its $109,000 electric sports car, and delayed plans to build the Model S sedan.

Musk said that demand for their product is still strong despite the weakened economy and market setbacks; that despite order cancellations they're still sold out of the Tesla Roadster for 2009 production, with more than 200 built and 1,000 more to go. The Model S sedan is back on track, with its unveiling set for March 26.

Musk also announced that they've signed leases to open showrooms in Chicago and London, and are closing in on locations in Manhattan, Miami, Seattle, and Munich. All showrooms should be open in 2009. In true Silicon Valley style, Musk promised launched parties.

With $40 million in private financing it secured in December and a deal struck with Daimler in January to build electric motors for the company's first 1,000 electric Smart Cars, Musk said he expects the company to be profitable by 2009.

[Beenthinking]

Long dead...NO technology, a $54,000 power plant...total market for cars over $100,000 a year is 15,000 in an average year...chassis (lotus), shell (lotus), interior (lotus), motor (someone else), batteries (yet another someone else). $240 million and what did they invent or create? My god, this is not my beautiful wife, this is not my beautiful house...

[Beenthinking]

Also, Elan personally guaranteed the delivery of each pre-ordered vehicle...I bet he wished he hadn't done that...he's rich for sure but lets face it....this baby is still born and he's on the hook for the few orders they've taken....They've made more money selling "gear" than they have the vehicle...good idea, HORRIBLE execution.

[emb77]

Perhaps I'm crazy, but if the entire year's worth of stock is sold out, what is the point of spending money to open dealerships all over the place? Is this simply to service cars when they have problems? Seems like an Auto 1.0 model rather than taking the opportunity to revise a failing business model.

[gordianknots]

Elon Musk seems to have become the king of creating "startup companies" that subsist off of the government. Tesla gets $350 Million in DOE loans (after building 200 overpriced cars), SpaceX gets hundreds of millions from NASA (and have thus far managed to orbit a single lifeless hunk of metal after crashing 3 times) and SolarCity is only viable because of the tax incentives and subsidies offered for solar power by the federal and CA governments [wikipedia claims the government pays up to 50%] . One wonders if he's really creating products that have a legitimate market need or if he's just really good at selling the government snake oil.