Earth Equity News

California Electric Car Start Up Applies the Brakes. By Claire Cain Miller, NYTimes, October 16, 2008. "Tesla Motors said Wednesday that it will lay off employees and delay production of its next battery-powered car. The once-hot electric car start-up also said it was removing Ze'ev Drori as chief executive and appointing [PayPal founder] Elon Musk, now the company's chairman, to the post... The news comes in the wake of several Silicon Valley venture capitalists warning start-ups that they must slash expenses and get to profitability as quickly as possible to cope with the likely recession. Tesla has had a particularly difficult year, with previous layoffs, production delays and changes in the executive ranks... Production of the Model S, which will be Tesla's second and more affordable electric car, will be pushed back to mid-2011... One reason for the delay is the difficulty in raising equity financing, Mr. Musk wrote. In September, Tesla said it was trying to raise $100 million to add to the $155 million it has already raised. Now, Tesla will wait for a low-interest loan from the U.S. Department of Energy, which the company cannot use until it passes an environmental review of the new San Jose headquarters and factory... In the meantime, Mr. Musk wrote, Tesla will focus its efforts on the Roadster, the company's first car, which sells for $109,000 and has a one-year waiting list. It will also focus on powertrain sales to other car companies, a business that Mr. Musk said is profitable."