In news that is symptomatic of today’s business and economic climate, Tesla Motors admitted that they were having financial issues and were in need of a quick cash infusion. The company announced that it had failed in a bid to raise $100 million, and would now try to raise at least $20 million to turn the company’s cash flow to the positive side.
Tesla CEO Elon Musk said in an interview with Reuters, “”We didn’t raise the $100 million but we still need to raise some money to get to cash flow positive. We actually probably only need on the order of $20 million to do that. We’re going to raise more than that, but we only need about $20 million.”
Musk, the founder of PayPal, also said that he would personally have enough money to stand behind the deliveries of all the cars that have been ordered to date. Musk stated, “I’ve gone on record as saying that I am personally standing behind delivering the cars and the deposits for the company. I have the means and wherewithal to do so. So people should have absolutely zero concern about their deposit.”
Tesla Motors has accepted about 1,200 deposits of between $5,000 and $60,000 each for the Tesla Roadster, which retails for $109,000. The terms for deposit acceptance make it clear that the deposit money can be used as working capital for the company. To date, Tesla has delivered fewer than 60 cars.
The Tesla Roadster is a completely electric sports car. The vehicle is able to travel up to 244 miles on a single charge from a wall socket, using state-of-the-art lithium-ion battery packs. The Roadster is very high performance for an electric vehicle, able to accelerate from zero to sixty miles per hour in 3.9 seconds. Tesla Motors says that the Roadster has a fuel economy equivalent to a 105 mile-per-gallon gasoline powered vehicle.
It may be that the Tesla Motors problems are typical of those which many green companies are facing. Very few companies which specialize in reducing our dependence on foreign oil are over-funded. As the world economy worsens, one must wonder if green companies and industries, often among the youngest and weakest, might be among the first to fall.