UPDATED: Elon Musk Takes Over CEO Role at Tesla, Amid Layoffs

Electric car maker Tesla has confirmed with us that Chairman and investor Elon Musk has taken over the role of CEO at the company. (The Register confirmed the news earlier this morning) Ze’ev Drori who was hired as CEO last December will continue on at the company as Vice Chairman of the Board of Directors. Tesla has also confirmed that there will be what they call “modest” layoffs.

Update: Tesla has posted to its blog a note from Elon Musk explaining the reason for the layoffs and the CEO change. As promised, the company says the move is “a strategic response to the liquidity crunch.” In the blog post, Tesla says it will focus on production of the Roadster, as well as powertrain sales to other automakers, in an effort to become cash-flow positive in the next six to nine months. Musk says the powertrain business is already profitable and “growing rapidly,” in spite of a soft auto market. As for the Model S, he says production will be delayed anywhere from six months or until mid-2011:

Tesla is absolutely committed to development of our next generation vehicle, to be unveiled early next year. However, we are going to reduce activity on detailed production engineering, tooling and commitments to suppliers until our Department of Energy loan guarantee becomes effective.

Tesla has needed to raise a lot of cash to get its electric vehicles into production and just announced that it will need to spend $250 million to build its new plant in San Jose. Good thing the company picked a close-to-home location for the plant: Musk also writes that the company is planning to close its Detroit-vicinity office, citing a need for “good communication, tightly knit engineering and a common company culture.”

Celeste LeCompte contributed to this article.


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