Extraordinary Recession Affects Tesla Motors

Newly appointed CEO of Tesla Motors, Elon Musk, created a new post, Extraordinary Times Require Focus, in his blog today.

He announces Tesla is going to “consolidate operations”, which means “lay off” a few people. This was expected since every car company is getting hit by the economic crisis, even electric car startups. He also had some discouraging news on the Model S:

Tesla is absolutely committed to development of our next generation vehicle, to be unveiled early next year. However, we are going to reduce activity on detailed production engineering, tooling and commitments to suppliers until our Department of Energy loan guarantee becomes effective.

This will delay in start of production of the Model S by roughly six months to mid-2011.

Elon Musk is a very competent businessman, as exemplified by his Paypal success and his SpaceX gig. He also seems to have a genuine passion for electric cars, as he has spent about twice as much money as he expected in the project. So I don’t think a few bad quarters will end the ride.

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