Financial Troubles Plague Electric Car Maker Tesla
Electric car maker Tesla Motors has received a lot of press attention over the past year when the automaker launched its gorgeous Tesla Roadster, an all-electric sports car that can go from zero to sixty miles per hour in just 3.5 seconds. . After numerous delays, a transmission change, and management changes, the Roadster finally entered production earlier this year.
Now the California-based automaker finds itself struggling for survival, with rapidly dwindling reserves putting pressure on the company like never before. Yes, with just $9 million in the bank, Tesla is struggling to survive even as demand for its $109,000 far outstrips supply.
Even rich people hold on tight to their money
Will Tesla be able to weather its current financial crisis? That remains to be seen given the global drop in car sales. Even the wealthy, the kind of driver who can afford the Tesla Roadster, are carefully considering their purchases, especially in light of the recent financial bloodbath on Wall Street that sent stock prices plummeting and wrecked Americans’ wallets. from all financial strata.
For its part, Tesla is reacting in several ways. Elon Musk, the CEO of the company, is investing ten to twenty million dollars of his own money in the company and has plans to lay off up to 20% of the company’s workforce. In addition, he is closing a satellite office in Michigan, moves the company hopes will buy him some time as he seeks additional financial backing.
Production delays hit Tesla’s bottom line
According to Forbes magazine, Tesla has raised $147 million from investors so far, with about $55 million coming from Musk, the automaker’s founder. Delays in shipping the Roadster have hurt the company’s financial picture, as only fifty cars have been shipped so far. Production has finally ramped up with Tesla saying that up to ten Roadsters a week are now being assembled. A small amount, but then we are talking about a small operation.
If Tesla can hold out for a few more months, additional aid in the form of grants from the US Department of Energy and aid from the State of California should kick in. In addition, with plans to build a midsize electric car at a new California factory in the next few years, Tesla’s franchise expansion should attract more investors to what many expect to be the largest small electric carmaker in the country. USA