The Tesla is one of the most advanced electric vehicles on the market. Its two-door roadster is an amazing machine that can go from 0-60 mph in just 3.7 seconds. The range of the roadster using battery power only is some 244 miles. Unfortunately, this Cinderella-like story could be coming apart at the seams as the founder of the company is facing financial difficulties. One estimate states that Tesla Motors is losing some $200k a month and the owner of the company says he is unable to borrow more money.
A recent article states:
The one thing he doesn’t have, by his own admission, is money.
“About four months ago, I ran out of cash,” he wrote in a court filing dated Feb. 23, reviewed by VentureBeat. That’s a problem not just for him but for Tesla, where he is the lead investor and chief product architect, as well as CEO. Musk’s willingness to funnel his own cash into Tesla has for years sustained the faith of fellow investors and reassured would-be car buyers in 2008 when the company’s finances were in perilous shape.
According to the filing — part of his pending divorce case from sci-fi novelist Justine Musk — Elon Musk has been living off personal loans from friends since October 2009 and spending $200,000 a month while making far less. Musk confirmed this in an interview with VentureBeat.
Tesla, likewise, is dealing with its cash flow problems by borrowing money from a friendly source — the United States government, which has eagerly backed cleantech startups through a Department of Energy loan program. Tesla burned through $37 million in cash in the last three months of 2009, according to amended S-1 documents, filed with the Securities & Exchange Commission in preparation for its IPO. Tesla slowed this burn rate in the first quarter of 2010 to $8.4 million, but only by drawing down part of a $465 million loan from the DOE, while reporting a net loss of $29.5 million. Tesla’s sales were flat year-over-year in the first quarter, but declined precipitously in the U.S., according to a former Tesla executive.
Now, Toyota has agreed to buy $50 million in shares at the time of Tesla’s initial public offering — if it manages to go public before Dec. 31. But for now, the company doesn’t have access to that promised cash, and must pay $42 million to buy the NUMMI plant in Fremont, Calif., from a Toyota-General Motors joint venture.
Only one thing is certain: Tesla’s not getting more money from Musk.
The Tesla sedan pictured below may not make it into production, either.
Hopefully someone, somewhere will step up to the plate and provide more financing to the troubled car maker. Hello, Google. HELP!