Posted on Oct 24th, 2008 by Vlad Balan
In a recent interview for Business Week, Elon Musk, Tesla Motors’ CEO talked about how the current economic situation is affecting Tesla. After Musk got more involved in the company where he’s also an investor, the Tesla Roadster proved to be quite a success, with 1,200 back orders for the $100,000. However, the future’s not so bright. Musk’s dream of creating more affordable electric cars is currently going through some rough times. After some time ago he announced that the company’s planning on going public next year, after securing verbal commitments for $100 million in private capital and federal loan guarantees geared at jump-starting development of alternative vehicles. However, after the United States has been hit hard by the credit crunch, investors tried to impose tougher terms, and the negotiations are currently not going so great. Musk, who was the co-founder of PayPal and has a current net worth of more than $300 million, had to invest more from his own money to keep the company’s development plans alive.
Still, the $60,000 Model S sedan, which was scheduled to enter production in 2010, was postponed. And this could mean big trouble for Tesla, analysts say: “If the market wants [electric cars] in the number Tesla is talking about [..] a larger auto company will bury them on cost.” Many auto industry giants, including GM, Toyota, Nissan or Daimler currently have an electric car in development, and Tesla can’t keep up with them.