BREAKING: Changes coming at Tesla, Musk to be CEO, Drori to Vice Chairman
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]
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