Summary
Is this a typical phase in the venture capitalist method of taking over a company, where, after a seemingly overgenerous initial investment that leaves the founders in charge a second round of financing gives the investors the leverage to oust the founder and replace him with professional management? Or, is this just a signal to the marketplace that Mr. Eberhard's statements to the effect that there is nothing special, or known only to Detroit, about building a car is, and was, foolish?
Analysis
Tesla has been putting off the introduction of its high performance lithium battery technology powered car for about a year; it is now scheduled for early 2008.
This may well be the result not only of the unavailability of a mass producible safe reliable lithium technology based high capacity battery, but also the result of the inability of Tesla's managers to engineer the basic car. Tesla has reported that it is having a problem finding a transmission, for example, suitable for its designed car. In Detroit in the OEM automotive industry a program manager who at this stage of a car's development was found not to have located a suitable transmission for the chosen power train(s) would be dismissed immediately as would his superiors for at least two levels above him who had not noticed or had covered up his gross incompetence.
However it must be admitted that if managers in Detroit who could not source a lithium battery safe and reliable enough to be mass produced were to be fired Detroit would be far less populated with gullible managers and executives.
Both Tesla and Detroit are under the impression that the lithium battery of their dreams is just around the corner. Tesla has bet around a hundred million dollars on this dream; Detroit has bet between one and two billion.
But Detroit will survive the non appearance of the practical lithium storage battery; it will simply continue to make hybrids, but in lesser numbers than planned, and with nickel metal hydride battery packs, of which over a million of the size needed for a Prius have been made and are still on the road. Detroit has now finished most of the development of and will emphasize diesels, turbodiesels, fuel cells, and hydrogen powered internal combustion engines. These power trains will be offered to the public as solutions to America's dependence on foreign oil.
Tesla, however, has no reason whatsoever to exist except as a showcase for the so far only laboratory generated performance characteristics of a lithium battery pack which has so far resisted mass or even repeated production.
In addition it is not clear that the Tesla has been engineered to the point of production or even of reliability testing, so that it may require a great deal more money to bring it to market even if the right lithium battery should appear and pass its testing in the actual final version of the engineered car.
I suspect that Tesla is over and that Mr. Eberhard has been set up to or has agreed to take the fall.
This does not bode well for the future of the high performance lithium battery powered car concept, not at all.
