3 Comments

Summary:

Silicon Valley electric car pioneer Tesla plans to stop production of its first electric car the Roadster in December 2011, according to a filing.

TeslaSantanaStore

Silicon Valley electric car pioneer Tesla plans to stop production of its first electric car, the Roadster, in December 2011, according to a filing. The news of a set deadline for the end of manufacturing of the Roadster emerged in a document Wednesday morning that detailed how Tesla plans to raise another $214 million in a combination of a follow-on public offering and a private placement, with shares bought by Tesla CEO Elon Musk and a subsidiary of Daimler, Blackstar Investco.

Tesla’s substantial gap between when it planned to end production of the Roadster and when it will begin selling its next car the Model S, or a next-generation Roadster, has been known for some time. But this is the first time I’ve heard the actual month it will stop producing, and the fact that Roadster manufacturing will stop within 2011 (not 2012). Tesla will still sell the remaining inventory of Tesla Roadsters that it will have produced by December 2011 with the help of Lotus in the first half of 2012.

Tesla has a deal to purchase 2,400 partially assembled “gliders” from car company Lotus to make its Roadster car, and as of March 31, 2011, Tesla had delivered around 1,650 Roadsters, leaving approximately 750 vehicles left to sell.

The end of this revenue from Roadster sales in the beginning of 2012, will provide a significant gap in sales, just as Tesla is ramping up investments in getting the Model S to market, and developing the Model X. As Tesla says in its S-1:

“We currently generate a significant percentage of our revenue from the sale of our Tesla Roadsters. . . Beyond 2011, our sales of new Tesla Roadsters will be limited to any vehicles available from our 2011 production. Prior to the launch of our Model S, we anticipate our automotive sales may decline, potentially significantly. . . As a result, we anticipate that we will generate limited revenue from selling electric vehicles in 2012 until the launch of our Model S.”

Tesla also has the problem of “not having any signed agreements for powertrain component sales after 2011,” Tesla writes in its S1. In particular, while Tesla has been working with Toyota on developing an electric version of its SUV the RAV4 (which Toyota plans to launch in 2012), Tesla doesn’t have the production deal in the bag. Tesla says it’s negotiating with Toyota to finalize an agreement to supply production parts for that project, but “no agreement has yet been executed and there are no assurances that we will be able to enter into any such agreement.”

As of March 31, 2011, Tesla had accumulated deficit of $463.9 million. If Tesla has delays in launching in Model S in 2012, or is unable to draw down the anticipated funds from its DOE loan facility, through 2012, Tesla could be in real financial trouble. Tesla anticipates its total capital expenditures for the remaining three quarters of 2011 and all of 2012 for the Model S and Model X, will be in the range of $330 million to $370 million.

You’re subscribed! If you like, you can update your settings

  1. Does not really explain why they would stop the sale of the roadster to begin with. Do they lose money on them? Can they not get more chassises from Lotus?

  2. Katie Fehrenbacher Thursday, June 23, 2011

    @roz. The original deal with Lotus was only for a certain amount of chassises. While I’m not sure of the real reason for why the deal wasn’t renewed, either Lotus didn’t find it in its best interests financially to renew the deal, or Tesla wanted to move quickly into making a more mainstream sedan.

  3. Lotus is retooling their plant for new models kicking the fabrication of these chassis out.
    http://www.autoweek.com/article/20110609/CARNEWS/110609849

Comments have been disabled for this post