Tesla Motors Get $40 Million Cash Infusion

November 3rd, 2008 at 12:00 am
 


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Silicon Valley Based electric car maker Tesla Motors Inc. is like any other web startup that’s going through some tough times during the economic slowdown in the country.  They are burning up a lot of cash fast and according to reports have only $9 million left in the bank.

CEO and co-founder Elon Musk was recently reinstated in light of the former CEO’s failure to raise $100 million venture capital.  The VC round was supposed to be used to complete their automobile manufacturing plant in San Jose CA.  However that plan has been delayed.

To keep the company running and on track, Musk has secured a $40 million in convertible debt financing.   "Forty million is significantly more than we need," Musk said in a statement. "However, the board, investors and I felt it was important to have significant cash reserves."

Tesla currently makes only one model, the Tesla Roadster.  The sports car is fully electric and has received great reviews from critics.  More than a thousand orders have been made, some of those have already been paid in full, but only a few dozen cars have been delivered to date.

Tesla says that the Roadster is a proof of concept and at $110,000 a pop will not be a viable cash cow for the company.  They are now in the process of designing a new model that will be priced at about $60,000 and will be a mainstream four door sedan / saloon.