If Tesla Roadster Production Ends in 2012, Show Us The Money

By John Voelcker

4,861 views Feb 1, 2010

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2010 Tesla Roadster Sport

Tesla Roadster with CA Clean Air Vehicle sticker -- flickr user jurvetson

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Whenever we're asked whether electric-car startup Tesla Motors will make it, we respond with our own question: What's the last carmaker started from scratch in the U.S. by entrepreneurs that's still with us, and when did it launch?

The answer is Chrysler, and the year was 1924. In other words, starting a car company is a tough, tough challenge. And it takes a whole lot of cash.

No Roadsters after 2011

The question of Tesla's survival cropped up again on Friday, when the Wired Autopia blog revealed that the company doesn't plan to sell its Tesla Roadster after 2011 due to tooling changes at the Lotus plant in Hethel, England, where the Roadster is assembled.

Thus far, Tesla has sold 937 Roadsters in 18 countries and built slightly more than 1,000. First deliveries took place at the end of 2008, and the company is now assembling up to 50 cars a week.

In the section of Tesla's initial public offering (IPO) paperwork that covered risks to the company, Tesla wrote that it won't replace the Roadster with a new model until "at least one year after the launch of the Model S, which is not expected to be in production until 2012."

Meaning, no income

The problem is simple: lack of cash flow. "We anticipate that we may generate limited, if any, revenue from selling electric vehicles after 2011 until the launch of the planned Model S,” Tesla says.

It admits that the launch "could be delayed for a number of reasons, and any such delays may be significant and would extend the period in which we would generate limited, if any, revenues from sales of our electric vehicles.”

Tesla says it has taken reservations for roughly 2,000 Model S electric sports sedans. The car is planned to be a four-door, five-passenger luxury sports sedan with a price of $57,400. After a $7,500 tax credit, the cost falls below $50,000.