Tesla's wild ride continues

October 15, 2008: 6:30 PM ET

By Michael V. Copeland

Maybe Tesla chairman Elon Musk flipped through the "R.I.P. Good Times"  slide deck that Sequoia Capital showed its startup CEOs last week about the tough road ahead. Whether he did or didn't, Musk pulled a few pages from it, as he announced Wednesday on the Tesla blog that not only would there be layoffs at the electric car  startup, he would be taking over as CEO from  Ze'ev Drori and delaying the company's next vehicle.

Drori, in the top spot for less than a year, will stay on in some capacity as vice-chairman of the Tesla board. "With SpaceX now having reached orbit and about to enter its third year of profitability, I can afford to increase time allocated to Tesla," Musk wrote on his blog.

What he will do with that time is refocus the car company's business on two areas of revenue: making and selling the $109,000 Roadster and building electric powertrains for other car companies. "Our goal as a company is to be cash-flow positive within six to nine months," Musk wrote. "To do so, we must continue to ramp up our production rate, improve Roadster contribution margin and reduce operating expenses."

The last bit means people will be losing jobs at the San Carlos, Calif.-based company - what Musk calls bringing a "Special Forces philosophy" to the business. It's not exactly clear what that means (push-ups? tattoos?), but it doesn't sound like a party.

The really big news for all of us that can't afford $109,000 two-seaters - and the ranks are growing daily - is that production of Tesla's next car, the not too, too expensive electric sedan dubbed the Model S, will be delayed six months to some time in mid-2011.

Once again, Musk offered to put his own personal wealth on the line if money gets tight. "We are not far from being cash flow positive, but, even if that threshold ends up being further than expected, I will do whatever is needed to ensure that Tesla has more than sufficient capital to get there," he writes.

Wonder where Musk keeps his money?

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About This Author
Michael Copeland
Michael Copeland

Michael V. Copeland joined FORTUNE as a senior writer in September 2007. Copeland has covered everything from electric cars to e-readers. He is a creator of Tech Mate, an irreverent video series in which he debates (and skewers) digital issues of the day. Before joining FORTUNE, Copeland was a senior writer at Business 2.0. Copeland graduated from the University of Pennsylvania.

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