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2008-10-16 08:07
Tesla chairman and Pretoria Boys high old boy, Elo

Tesla chairman and Pretoria Boys high old boy, Elon Musk, shows off the Tesla Roadster to Californian governor and perpetual action hero Arnold Schwarzenegger. After retrenching 100 employees Tesla might need all the help it can get.

Despite the imminent construction of a new production facility Tesla staff are facing severe layoffs.

Under the auspices of South African born chairman Elon Musk, Tesla has done what many major manufacturers should have, but did not have the wherewithal to do – design a high performance, guilt-free electric sportscar.

The saviour

The consequent Tesla roadster, based upon the redoubtable Lotus Elise, offers epic performance, Coffee machine electricity running costs and zero vehicle specific emissions.

Across the free world performance car fans rejoiced and polar bears hugged each other; safe in the knowledge that track days might not threaten their ice caps in future.

Unfortunately Tesla has not escaped the teething issues which beset any niche manufacturer. There have been monumental gearbox issues, which delayed the Roadster delivery to customers, with Musk having to reassure buyers who put down hefty deposits.

Production has been running smoothly since March this year, but rampant initial customer demand (especially from burgeoning right-hand drive markets) and Tesla’s own model expansion plans (it’s planning a sedan) have necessitated the need for larger production facilities.

Here lies the problem. As the technology companies and investment banks which provided much of the cash for the initial research and development of the Roadster find themselves floundering in the wake of the global credit crisis, sourcing funds to build the necessary facilities to ramp up production to a profitable level is proving an extraordinary challenge.

Exacerbating the state of affairs at Tesla has been the offset between projected demand and tangible orders, which have stagnated rapidly in the last month due to the global financial crisis.

The saviour might now need saving?

The American ministry of energy has pledged $150 million for Tesla’s new San Jose factory, whilst the state of California is providing Tesla with generous tax breaks, which should allow the technology firm to weather the current credit and funding storm.

For nearly 100 employees, half of Tesla’s entire staff compliment, it’s all too late though, as they’re about to be retrenched. The company’s CEO - Ze’ev Drori – is also rumoured to be leaving.

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