On October 15th, Tesla CEO Elon Musk posted an interesting message on the Tesla site titled Extraordinary Times Require Focus.  The following are the main points of his announcement:

1. Due to the current economic situation, Tesla will try to  ”ramp up our production rate, improve Roadster contribution margin and reduce operating expenses”.
2. Elon Musk’s own role in Tesla “will expand from executive chairman and product architect to CEO.”
3. Tesla is ”ramping down and will close our Rochester Hills office near Detroit. Good communication, tightly knit engineering and a common company culture are of paramount importance as Tesla grows.
4. Tesla will reduce activity on detailed production engineering, tooling and commitments to suppliers until our Department of Energy loan guarantee becomes effective.
5. There will be a delay in start of production of the Model S of roughly six months to mid-2011.

Across the internet Tech people have bemoaned the heartless job cuts, always a morale killer for any company.  A “common company culture” smacks of corporate doublespeak to me. 

My opinion is that with the major automobile manufacturers entering the electric car market in the near future, Tesla just can’t compete at that level.  Sure, they can still produce an exotic luxury car, but wouldn’t be able to make an affordable mass produced car in the same price range.  By making tough decisions now, the company will stay out of debt during uncertain times.   Perhaps if they went into selling conversion kits using their advanced technology, those buying Chevy Volts in the near future could opt in for “Tesla Kits” to pimp their ride.  Either way, nobody I know is planning major purchases in the near future, so delaying things 6 month might be a smart move.