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Summary:

Not too long ago, Tesla Motors CEO Elon Musk called a government guarantee for loans to build its mass-market electric sedan factory a “when, not an if.” Supposedly all the luxury electric car startup needed to begin construction on a plant for its elusive Model S […]

Not too long ago, Tesla Motors CEO Elon Musk called a government guarantee for loans to build its mass-market electric sedan factory a “when, not an if.” Supposedly all the luxury electric car startup needed to begin construction on a plant for its elusive Model S was a $200 million loan guarantee from the Department of Energy. But in an interview with the San Francisco Chronicle, his confidence turned to hedging on plans to produce the Model S for the duration of the recession. The Chronicle writes:

The factory project wasn’t abandoned, but Musk says it’s no longer a done deal. . . . Rather than ramping up, the company is hunkering down. “I hate it,” said Musk. “I really didn’t want to do it. But I also didn’t want to be a casualty of the recession and see all that time and effort go to waste.”

Musk isn’t too worried, though. Again, from the Chronicle:

Musk says the company is now in good shape to reach profitability, despite the recession. Still, he’s hoping the recession will be brief, perhaps ending in a year. “It’s funny: in the good times, no one thinks there can be bad times,” he said. “And in the bad times, no one thinks there can be good times.”

Musk’s predicted timeline matches the one generally agreed on by forecasters. But while the recession is expected to officially last until mid-2009, recovery could be slow enough to make a turnaround next year little more than economic semantics. As the banking system rebuilds, credit markets could remain tight and keep Tesla’s long-promised Model S entirely out of reach.

  1. What To Read This Morning Tuesday, December 30, 2008

    [...] more bandwidth. [The New York Times] What is Apple going to do with all its cash? [TheAppleBlog] Tesla Backpedals on Model S [Earth2Tech] Tesla’s rough road ahead [Jeff Nolan] Social media trends in 2009. [...]

  2. BNET Energy mobile edition Tuesday, December 30, 2008

    [...] its Model S was a $200 million loan guarantee from the Department of Energy. [Source: Earth2Tech] posted by Christopher Wink December 30, 2008 @ 6:01 [...]

  3. Fisker to Reveal Hybrid Convertible Concept, the Karma “Sunset” « Earth2Tech Wednesday, December 31, 2008

    [...] If the concept car makes it to real-world production, it could help Fisker forge a distinct path in the green car market — one that leads to a small luxury niche, rather than mass-market scale. According to the most recent available data from auto industry research firm R.L. Polk & Co., convertibles make up only about 2 percent of light-vehicle registrations. For most automakers, they serve more as halo vehicles (designed to boost brand image and lure people into showrooms) for automakers than real sales drivers. For a startup like Fisker, sticking to niche markets could be a smart post-recession bet, as becoming large enough to mass produce vehicles has proven capital intensive enough to cause competitors like Tesla to reconsider broader more mass market plans. [...]

  4. Fisker to Reveal Hybrid Convertible Concept, the Karma “Sunset” Wednesday, December 31, 2008

    [...] If the concept car makes it to real-world production, it could help Fisker forge a distinct path in the green car market — one that leads to a small luxury niche, rather than mass-market scale. According to the most recent available data from auto industry research firm R.L. Polk & Co., convertibles make up only about 2 percent of light-vehicle registrations. For most automakers, they serve more as halo vehicles (designed to boost brand image and lure people into showrooms) for automakers than real sales drivers. For a startup like Fisker, sticking to niche markets could be a smart post-recession bet, as becoming large enough to mass produce vehicles has proven capital intensive enough to cause competitors like Tesla to reconsider broader more mass market plans. [...]

  5. Fisker to Reveal Hybrid Convertible Concept, the Karma “Sunset” | Alternative Energy News Wednesday, December 31, 2008

    [...] In addition to the production version of its plug-in hybrid sedan, the Fisker Karma, Fisker Automotive plans to show a concept car called the Fisker Karma S (for “Sunset”) at the North American International Auto Show in Detroit next month. What’s unusual about the Sunset is not that it’s a hybrid — the show will feature a gang of those from big automakers this year — but that it appears to be a convertible (suggested by the missing B-pillar). If the concept car makes it to real-world production, it could help Fisker forge a distinct path in the green car market — one that leads to a small luxury niche, rather than mass-market scale. According to the most recent available data from auto industry research firm R.L. Polk & Co., convertibles make up only about 2 percent of light-vehicle registrations. For most automakers, they serve more as halo vehicles (designed to boost brand image and lure people into showrooms) for automakers than real sales drivers. For a startup like Fisker, sticking to niche markets could be a smart post-recession bet, as becoming large enough to mass produce vehicles has proven capital intensive enough to cause competitors like Tesla to reconsider broader more mass market plans. [...]

  6. Fisker to Reveal Hybrid Convertible Concept, the Karma “Sunset” | Eco Friendly Mag Thursday, January 1, 2009

    [...] If the concept car makes it to real-world production, it could help Fisker forge a distinct path in the green car market — one that leads to a small luxury niche, rather than mass-market scale. According to the most recent available data from auto industry research firm R.L. Polk & Co., convertibles make up only about 2 percent of light-vehicle registrations. For most automakers, they serve more as halo vehicles (designed to boost brand image and lure people into showrooms) for automakers than real sales drivers. For a startup like Fisker, sticking to niche markets could be a smart post-recession bet, as becoming large enough to mass produce vehicles has proven capital intensive enough to cause competitors like Tesla to reconsider broader more mass market plans. [...]

  7. Tesla to Sell Even More Expensive Electric Car « Earth2Tech Monday, January 12, 2009

    [...] Tesla has basically put its cheaper Model S on the back burner (with Tesla CEO Elon Musk recently hedging on whether or not the Model S factory was assured), we don’t think going even more luxury is a good direction [...]

  8. Tesla Snubs Customers for A Couple Million Dollars on Delayed Roadsters « Earth2Tech Wednesday, January 21, 2009

    [...] owners), it looks like the price hikes will bring in only a few million dollars for a company that claims to need $200 million in loans to produce a long-promised sedan priced for the mass market — the supposed key to [...]

  9. Gary in Pinellas County Tuesday, April 21, 2009

    Wow, just another example of our crippled economy serving as “anti-lock brakes” for technological (and overall societal, really) progression. But honestly I am not too surprised. I’m not exactly an expert on all-things financial, but I vaguely remember reading some kind of article or post on CNN Money about Tesla Motors’ financial woes. Oh well, I guess we’ll just have to wait another 15 years before an all-electric vehicle becomes accessible to the public without having to take out a second mortgage. Thanks.

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