Electric car maker Tesla Motors has been getting a lot of press over the past year as the automaker launched its gorgeous Tesla Roadster, an all-electric sports model that can go from zero to sixty mph in just 3.5 seconds. After numerous delays, a transmission swap out, and management changes, the Roadster finally went into production earlier this year.
Now, the California based automaker is finding itself struggling to survive, with fast dwindling reserves putting pressure on the company like nothing else to date. Yes, with just $9 million left in the bank, Tesla is struggling to survive even as demand for its $109,000 car far outstrips supply.
Even Wealthy People Are Holding Onto Their Money Tightly
Will Tesla be able to weather its current financial crisis? That remains to be seen given the worldwide slump in auto sales. Even wealthy people — the type of driver who can afford the Tesla Roadster — are carefully considering their purchases especially in light of the recent financial bloodbath on Wall Street that sent stock prices plummeting and tore through the portfolios of Americans of every financial stripe.
For its part, Tesla is reacting in several different ways. Elon Musk, the CEO of the company, is pouring ten to twenty million dollars of his own money into the company and has plans to lay off as many as 20% of the company’s workforce. In addition, a satellite office in Michigan is being closed, moves that the company hopes will buy it some time as it searches for additional financial backing.
Production Delays Hammer Tesla’s Bottom Line
According to Forbes magazine, Tesla has raised $147 million from investors so far, with some $55 million coming from Musk, the automaker’s founder. Delays in shipping the Roadster have hurt the company’s financial picture as only fifty cars have been shipped thus far. Production has finally been increased with Tesla saying that as many as ten Roadsters per week are now being assembled. A tiny amount, but then we’re talking about a minuscule operation.
If Tesla can hang on for a few more months, additional help in the form of grants from the US Department of Energy and help from the State of California should begin to kick in. Moreover, with plans to build a midsize electric car at a new California factory within the next few years, the expanding Tesla franchise should attract additional investors to what many hope will be the biggest little electric car maker in the USA.