Tesla has one foot in the grave? UPDATE #2 A related article on this rumor regarding Tesla founder Elon Musk being broke.
06/01/10 'Last week, Tesla and Toyota announced that they were partnering in a joint bid to developing electric cars, auto components, production systems and engineering support.
In this regard, Toyota said it will buy an undisclosed stake in Tesla for $50 million.
Tesla also said it will buy a shutdown Toyota-General Motors Co. joint venture factory, known as NUMMI (New United Motor Manufacturing Inc.), in California for $42 million to build its Model S, a sporty electric sedan, and other vehicles.
However, strains began to appear when Toyota said it will continue to develop its own range of electric vehicles though Tesla's long-distance models would give it more options.
In its amended IPO filing, Tesla said the two companies only plans and have not agreed to make the electric vehicles. "We have not entered into any agreements with Toyota for any such arrangements, including any purchase orders, and we may never do so,"'
Tesla's Rachel Konrad also recently told Automotive news - “We need about 500,000 square feet for our plant, NUMMI is 5 million.”
These are huge blows to the electric automaker since Tesla has just moved all of their offices to California in anticipation of this deal going through. If the deal falls through, one of my sources says they are planning on moving all of their offices again to a smaller factory.
It has now been 6 years since the creation of Tesla motors and the company has yet to see a profit. AutoSpies.com05/31/10 Tesla Motors CEO Elon Musk seems to have it all. The electric-car entrepreneur is the toast of Silicon Valley, Sacramento, and Tokyo after unveiling a plan to revive Toyota’s shuttered NUMMI plant last week. And deal-hungry Wall Street bankers are angling to take his company public. He’s even a Hollywood star, with a cameo in the hit Iron Man 2 movie, said to be based on his life story.
The one thing he doesn’t have, by his own admission, is money.
“About four months ago, I ran out of cash,” he wrote in a court filing dated Feb. 23, reviewed by VentureBeat. That’s a problem not just for him but for Tesla, where he is the lead investor and chief product architect, as well as CEO. Musk’s willingness to funnel his own cash into Tesla has for years sustained the faith of fellow investors and reassured would-be car buyers in 2008 when the company’s finances were in perilous shape.
According to the filing — part of his pending divorce case from sci-fi novelist Justine Musk — Elon Musk has been living off personal loans from friends since October 2009 and spending $200,000 a month while making far less. Musk confirmed this in an interview with VentureBeat.
Tesla, likewise, is dealing with its cash flow problems by borrowing money from a friendly source — the United States government, which has eagerly backed cleantech startups through a Department of Energy loan program. Tesla burned through $37 million in cash in the last three months of 2009, according to amended S-1 documents, filed with the Securities & Exchange Commission in preparation for its IPO. Tesla slowed this burn rate in the first quarter of 2010 to $8.4 million, but only by drawing down part of a $465 million loan from the DOE, while reporting a net loss of $29.5 million. Tesla’s sales were flat year-over-year in the first quarter, but declined precipitously in the U.S., according to a former Tesla executive.
Now, Toyota has agreed to buy $50 million in shares at the time of Tesla’s initial public offering — if it manages to go public before Dec. 31. But for now, the company doesn’t have access to that promised cash, and must pay $42 million to buy the NUMMI plant in Fremont, Calif., from a Toyota-General Motors joint venture. More at VentureBeat.com