Tesla owner Elon Musk takes over as CEO; Announces layoffs, Model S delay
10/15/2008, 5:19 PM
By Nick Aziz
Millionaire entrepreneur Elon Musk, the largest investor and principal owner of Tesla Motors, today announce he will take over the role of CEO at the electric car startup. Musk, who co-founded PayPal and went to make a $328 million fortune, has ousted Tesla Motors CEO Ze’ev Drori, announced major layoffs, and confirmed delays in the Model S sedan project.
Musk, who also hold the titles of Chairman of the Board and Product Architect, says these though financial times require strong leadership and a sound business model for a company like Tesla to survive. Accordingly, he has made it is goal to be cash-flow positive within six to nine months.
To accomplish this, the company has to focus on ramping up production of its profitable $100,000 Roadster model, while also reducing operating expenses. The latter will be achieved in part by layoffs. Musk has not said how many workers will leave the company, but various internet reports indicate as many as 100 jobs might be cut — that’s about 50% of Tesla’s workforce.
Tesla will also increase efforts to build components for other companies. “Our powertrain business is profitable today and is also growing rapidly,” Musk said in a blog post on the company’s website.
The company’s former CEO, Ze’ev Drori, will stay on the board of directors as vice-chairman. Drori replaced Michael Marks, who served as interim CEO after co-founder Martin Eberhard was ousted in August 2007.
On the product side, production of the $60,000 Model S sedan is expected to be delayed by roughly six months to mid-2011.
“Tesla is absolutely committed to development of our next generation vehicle, to be unveiled early next year,” explained Musk. “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.”
Despite the delay, Musk sees an upside. “We will spend the extra time refining the vehicle design and powertrain technology, so the car will end up being slightly better,” he said.
Musk didn’t mention how the pullback will affect the planned $30,000 Bluestar family sedan, though it’s safe to assume there will be a delay on that project as well.
10/15, 5:57 PM
posted by:
Khyber1921
It will be interesting to see how the Chevy Volt is integrated into America’s motoring society. The success of such a vehicle will definitely pave the way for smaller companies like Tesla to gain notoriety and the press it needs. Furthermore, NGO’s like Plug-in America (PIA) should really do their best to market these types of vehicles as viable alternatives to gasoline powered cars.
http://homepages.nyu.edu/~hbr215/index.html
10/15, 6:01 PM
posted by:
Lariat Luxury Locomotive Liner No.3
The problem is that we really need more companies like Tesla versus GM as they bring the true entrepreneur component to the market; GM has stifled and destroyed this component eons ago. In many ways, it would be best for the American automotive industry—and the American automotive consumer—if GM does go under.
10/15, 6:34 PM
posted by:
golf4me
I don’t like $100k golf carts.
10/15, 7:26 PM
posted by:
deutschetouring1337
I bet they wont get this off the ground even.
10/15, 7:56 PM
posted by:
johnnycanuck
If Tesla is still around a year from now I’ll lick one of their batteries.
10/15, 8:16 PM
posted by:
trantz
The franchise system is tested and true. Wonder how they will distribute these? Through retail outlets? How about service? Warranty?
10/15, 10:15 PM
posted by:
The Stig
Tesla needs to be absorbed by a major. That’s probably their exit strategy anyway.
10/16, 12:14 AM
posted by:
441Zuke
tucker… need i say more
10/16, 12:23 AM
posted by:
02WRXPSM
You wouldn’t like getting your ass kicked on a race track by a $100k golf cart, either. Or on the street, or on the highway…
10/16, 4:49 AM
posted by:
BMW M1
johnny: There will be demand for this stuff for atleast a few years. The price bracket puts it into the range of people who will not be very badly affected with the state of the economy. Also, its got that “Green” image going for it.
lol, hope those batteries dont put out a really high voltage
10/16, 12:08 PM
posted by:
golf4me
Maybe I’d get my ass kicked for 30 miles…probably not even that. Then what? You gotta stop somewhere overnight! Plus the damn thing cant even carry my golf bag!
10/17, 2:54 PM
posted by:
Sabon
If there is anymore more ignorant and stupid than golf4me please stand up. I know it will be hard to find anyone more ignorant and stupid that IS able to stand up. Maybe GW Bush.
Hey golf4me. How about getting some facts. Or do you even know what that means?