What Was That About Small Businesses?

Tesla Motors is feeling the economic crunch.

Tesla Motors, the fledgling maker of electric sports cars, admitted today it is losing money and in a “critical phase” financially. An undisclosed number of Tesla’s 250 employees will be laid off (and the current chief executive will move to the board of directors), and its Detroit-area office will be shut down.

Further delays and setbacks for the company’s production and growth plans were also announced. Interestingly, these developments come at a time when the public’s interest in electric cars seems to have taken off, given the reaction to General Motors’ recent showing of the production-ready Chevrolet Volt and the introduction of several new electric protypes at the Paris Motor Show this month.

Elon Musk, the Silicon Valley entrepreneur who has been the chief investor in Tesla, said in a blog posting Wednesday on the company’s Web site that with SpaceX, his separate project to develop private-enterprise rockets for outer space, having achieved its first successful launch, he now has more time to devote to turning Tesla into a profitable venture.

This is really awful. Tesla has a dealership by the 405 freeway in West LA, and Governor Schwarzenegger pushed really hard to keep their production in California. Right now their brand is pretty high-end, though they were moving toward making a sedan version, so that could be part of their troubles. The cars, however, are amazing. Faster than a Porsche and can go hundreds of miles on a single charge. They have had some fits and starts with mass producing them, but clearly their future appeared to be bright until the recent economic woes.

What's keen to keep in mind here is that the major auto companies just got a $25 billion dollar bridge loan from the federal government to keep producing the garbage cars they make. Here's a company pushing a green technology and bringing it to market faster than anybody else. I hear all this talk in the election about small businesses being the backbone of America and here is one. So where's their help?