Electric car startup downshifts for rough road

[n2doc]

David R. Baker, Chronicle Staff Writer
Sunday, December 28, 2008

In retrospect, the timing could have been better.

Elon Musk's electric sports car company, Tesla Motors, said in September that it would build a factory in San Jose to produce its new sedan. It was a milestone for both the business and the green-tech industry on which Silicon Valley has pinned so many of its hopes.

Unfortunately, the announcement landed in the midst of a firestorm burning through the financial world.

Just days earlier, Bank of America had bought Merrill Lynch, and Lehman Bros. had declared bankruptcy. Banks pretty much stopped lending, financiers pleaded for government bailouts and the stock market tanked.

Not the best time to build a factory or launch a car.

Musk, who had been the company's chairman and one of its main investors, took over as chief executive officer and started slashing costs. The company cut staff and scaled back plans for its Model S sedan, delaying the car's introduction by at least six months.

more:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/28/BUA914SOEM.DTL