Tesla Motors, the troubled California firm behind the famous "Roadster" battery supercar, says it now has finance in place which will carry it to the point of positive cash flow - though it remains coy as to who put up the money. The firm also insists that some development work is proceeding on its next model, the broader-appeal "Model S".
Tesla's latest round of troubles, following previous delays to the Roadster and problems with its power train, came into view last week. A planned $100m+ financing round failed as global credit dried up, and it was revealed that Tesla had only $9m in the bank - having taken multiple tens of millions in deposits from 1200 customers reserving their Roadsters.
However, the company has thus far delivered fewer than 60 cars, mostly with an inferior "intermediate" transmission which doesn't deliver the specified, supercar acceleration: 0-60 quicker than four seconds. The intermediate transmissions are to be replaced in future at Tesla's expense. Company reps have confirmed to the Reg that the Roadsters now shipping have the full, promised neck-snapping performance - though a similarly-priced Porsche 911 Carrera will still beat the Roadster by a large margin on top speed, range and time to top off.
It was clear following the failed financing round that Tesla would be unable to deliver the promised cars, or even refund the deposits it had taken, unless fresh funds could be raised. At this juncture, Elon Musk - Tesla's chairman and primary financial backer - took over directly as CEO. He announced that the firm would now focus primarly on making Roadsters and selling power trains to other companies:
At Tesla, we have decided that the wise course of action is to focus on our two revenue producing business lines - the Roadster and powertrain sales to other car companies. In the Roadster, Tesla has a unique product with a large order book that continues to grow, despite softness in the automobile sector. Our powertrain business is profitable today and is also growing rapidly.
He also announced some further layoffs, saying that this was a "special forces philosophy" - eg the departing people would be good enough for the regular firms, but not the elite Tesla workforce.
In order to allay media speculation regarding the company's future, Musk also said that he expected to raise more financing from "existing investors in the company" - one of the largest of whom, of course, is Musk himself. His personal fortune, acquired from successful involvement in PayPal among other ventures, has been estimated in excess of $300m.
Musk's remarks to the press implied that he would personally guarantee the deposits of Roadster customers if the worst came to the worst, and that any further significant progress on the planned, mid-market "Model S" battery sedan would be contingent on yet-to-be-cleared government loans of $200m.
It has now been announced that $40m of new financing has now been raised - twice what the new CEO considered necessary to bring the firm to "positive cash flow".
We asked Tesla how much of the new $40m wasn't from Mr Musk. They said "We aren’t breaking down the financing among various individual or institutional investors yet".
Despite the earlier remarks about focus on Roadsters and powertrains, a company spokesperson said some work on the Model S was still going on:
The Model S development plans are still proceeding, albeit at the new pace we announced last month. The $40M will be used in part for Model S development, as well as ongoing operations...
Musk has previously said that with things going well at his other main venture, the rocket company SpaceX (which achieved its first successful launch recently), he now has plenty of time to spend at Tesla. Having taken firm control of the company, and - it seems certain - backed it to the hilt financially, the success or failure of Tesla Motors would seem more and more to be a personal success or failure for Elon Musk. ®