Tesla hopes its cars can electrify industry, buyers despite downturn
Despite a potential innovation recession looming over Silicon Valley, Tesla Motors revved its PR engine this weekend. The ailing electric-car company on Sunday hyped the fact that investors had promised $40 million in new funds to keeping the operation rolling.
The new funding will accelerate production of the Roadster, a sporty all-electric and heart-throb for alt-energy proponents. While there's huge interest in the $109,000 car, Tesla has only been able to deliver on about 50 of the 1,200 orders. (It would take more than two years to fill all of those orders at its current rate of pumping out 10 vehicles a week.)
Tesla has not disclosed who contributed to this new burst of cash, but said that many of its past big investors played a part. Some of those major players include Google's co-founders, a former eBay chief, prominent venture firms, and Tesla chief executive Elon Musk, who invested in Tesla before taking the reins.
"The money comes during a difficult period for Tesla," reports the New York Times. "On Oct. 15, Mr. Musk, its biggest investor, replaced Ze’ev Drori as chief executive. The company announced it would lay off 87 workers, 24 percent of its staff, and delay production of its Model S sedan. It also shelved plans to raise $100 million, citing the financial crisis."
With recession turning from a hushed word to an accepted reality, alt-energy start-ups such as Tesla stand to lose the most. VC firms are clamping down on risky investing, credit is drying up, potential customers might think twice before writing a $100,000 check, and lower oil prices threaten to take away the incentive to pour money into green alternatives.
Musk seems unfazed. With $40 million in committed funds this week, $200 million in low-interest loans from the Department of Energy coming next year, and Time magazine recently naming the Roadster its second favorite invention of 2008, Musk thinks his company can navigate whatever tight turns the economy presents.