Tesla CEO: GM couldn’t afford us now

The Roadster goes 0 to 60 mph in 3.9 seconds. Image: Yi-Wyn Yen

By Yi-Wyn Yen

SAN FRANCISCO – How much is Tesla Motors worth?

Tesla CEO Elon Musk won’t say, but it’s at least too expensive for General Motors to buy. “I’m not sure they can afford Tesla right now,” he said during a 30-minute talk Friday at the Web 2.0 Summit.

The South African-born entrepreneur talked candidly with host John Battelle about the failures of the auto industry and Tesla’s own troubles. Battelle had asked why GM (GM) doesn’t buy the electric car startup.

GM reported a $2.5 billion loss in the third quarter Friday and also warned that it could run out of cash soon. Said Musk, “There’s an issue with organized labor and trade and management still acts like it’s 1955. There are too many country club memberships, and [GM] management has focused on the wrong thing. “

Tesla has been plagued with its own problems. In mid-October Musk, who has helped bankroll Tesla, became its third CEO in less than a year, announced layoffs and delayed the debut of its forthcoming electric sedan, the Model S.

Musk explained why Tesla had to let go 10% of his employees last month. “Before market Armageddon occurred, the point was to raise $100 million. And we intended to get going with that in full force before the market collapsed,” he said.

The company settled for cutting costs and raising $40 million from its existing investors. Musk says he’s backing half of the $40 million round. He has already poured $55 million of his own money into the company.

Despite the tough economic climate, Musk felt confident that Tesla could have raised the $100 million. However, he said that would have meant giving up more control of the company.

Production of the Model S has been delayed six months to mid-2011. Musk says the company is churning out 10 of its Roadster sportscars a week and by early next year, will make 30 cars per week. He says Tesla will be profitable when it sells its expected lot of 1,200 Roadsters.

Said Musk, “I may be optimistic with the schedule, but I can deliver.”

Back to main column

Filed under Uncategorized

10 Comments | Add a Comment | Email

Digg

Facebook

THE BIG 3 , ARE STUCK IN THE MUD !!
WE NEED NEW CAR TEK NOW !! NEW IDEAS ABOUT CARS AND TRANSIT TO GET US TO THE NEXED LEVEL, OR CHINA OR INDIA WILL !!
THINK ABOUT THAT?!

Posted By corey b ,new york ,ny : November 22, 2008 8:22 pm

GM should hire the REAL Tesla Founder: Martin Eberhard as CEO – just to shut up Elon Musk, who is just the investor.

Musk is such a swell-head.

Posted By rex rockville md : November 17, 2008 9:19 pm

Why bother with this? 99% of our U.S. population cannot even afford this car anyway!! Who cares?

Posted By Mike Chicago, IL : November 12, 2008 1:02 pm

Please,first of all I do love America but BIG BUSINESS has failed the people it depends on the most.American made cars are some of the most unreliable cars in the world. They dont hold value and by the time you pay them off it’s time to buy another one.Stop wasting taxpayers money on nonsense and invest it in something of value.Let them go under,start over and do it right this time!!!!! Some home owners wish they can be bailed out this easily.Stop STOP THE NONSENSE!!!!!

Posted By Tawanda Williams Tampa,Florida : November 11, 2008 8:00 am

Detroit is certainly not willing to lead, so they should get out of the way! Rather than bail out the incompetent, lets put out tax dollars to use. Use the money to buy promising technology and make it public domain. We were foolish to bailout Wall Street in the hopes our money would get them lending again. Instead, they’re sitting on the money. Will we be foolish again thinking this next bailout will prevent massive layoffs? When Detroit is going through the next round of layoffs, companies like Tesla will be hiring thousands to build their 200 mile range electric sports car. Where should uncle sam place his bet? That’s a no brainer!

Posted By shane algarin, san diego ca : November 10, 2008 6:23 pm

Tesla’s success may not be directly linked to the price of crude, due to the cost of Tesla’s current model, being in the range of those who aren’t affected by the price of oil, however thier sucess is linked to how much oil and environmental concerns have the lime light because Tesla’s current target market is especially concerned with making a good impression, so indirectly their success is related to the price of oil because the higher the price of oil, the more these concerns are in the lime light.

Posted By EnergySaverUS Aurora, IL : November 10, 2008 9:20 am

Detroit and Japan are heading towards hybrids which has the COMPLEXITIES and faults of both gas and electricity. Most of the electric car companies are heading towards slow, relatively low costs minimal cars. Tesla is working from high performance costly electric cars towards affordable electric cars.
Tesla will win regardless as long as musk keeps his eye on the ball. Hopefully he does not start another company and his current divorce does not interfere.

Posted By grr, Highlands Ranch, CO : November 9, 2008 12:11 am

I certainly disagree with your assessment Willis. Folks who buy the Tesla Roadster are the last people to worry about gas prices.

Posted By Derek, Xenia Ohio : November 8, 2008 3:22 pm

gooo Tesla! cant wait till they can prove all the haters wrong.

Posted By wellington, NZ : November 7, 2008 9:03 pm

Tesla’s success is inverse to light sweet crude.

doh!

Posted By Willis, Mt.View, CA : November 7, 2008 5:45 pm

CNNMoney.com Comment Policy: CNNMoney.com encourages you to add a comment to this discussion. You may not post any unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate the law. Please note that CNNMoney.com may edit comments for clarity or to keep out questionable or off-topic material. All comments should be relevant to the post and remain respectful of other authors and commenters. By submitting your comment, you hereby give CNNMoney.com the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying information via all forms of media now known or hereafter devised, worldwide, in perpetuity. CNNMoney.com Privacy Statement.