Blog Post

GE "Watching" Tesla, Does Not (Yet) Invest

Updated: This weekend CNN published a report from Silicon Alley Insider which says, “It appears as though GE Capital (s GE) has invested in Tesla Motors.” The publication took the words of Tesla CEO Elon Musk, in a leaked interview with Car and Driver on a Tesla forum, at face value and quotes Musk as saying: “[A] bit of news that hasn’t come out yet [is] General Electric is investing in Tesla. [GE Capital] will be the second-largest investor in this round, after me.”

Well, we asked GE if they could tell us more about the Tesla investment or a funding in the works. GE Energy Financial Services, which is housed in GE Capital, says:

GE Energy Financial Services is active in investing in companies developing electric vehicles as well as batteries for them. For example, we have invested in the Norwegian electric car company Think as well as the Massachusetts-based lithium ion company A123. We have not invested in Tesla, although we are closely watching it and several other companies in this area.

In other words GE is having discussions about investing in Tesla but has not yet. And who knows how far along those discussions are — it’s not that unusual for Musk to try to “guide” the press on milestones like a DOE loan. If GE does end up investing, it could really help the company get its Model S sedan, unveiled in concept form last week, into customer garages. Regardless, the company has a very tough road ahead, particularly if it doesn’t get a DOE loan. And if GE is in the process of doing due diligence on Tesla right now, it already knows that.

Update: Tesla sent us an official response and said that Car and Driver interviewed Musk at a time when:

GE had committed to invest in Tesla and sent an e-mail confirming the investment, but GE backed out on the day it was supposed to wire funds to Tesla. The decision came after GE went into company-wide capital conservation mode. In any case, GE’s investment allocation was taken up by venture capital firms Westly Group, Technology Partners and Draper Fisher Jurvetson, and Tesla closed the $40 million round without a problem earlier this year.