Tesla's bump in the road

The Merc reports that Tesla has killed (or at least postponed) its sedan, laid off the engineering workers designing the car, and is delaying its planned San Jose plant.

The announcement was made on the blog of founder (and now CEO) Elon Musk, who’s giving up his SpaceX hobby to come back to Tesla. He blames the financial crisis, which the Merc interprets as meaning a “credit crunch” but I see as meaning “rich people with plummeting stock portfolios can’t afford a $100,000 toy.”

No mention was made in either story of the Dodge EV, although Scientific American notes that Tesla’s woes come as the big three are getting a $25 billion subsidy to develop alternative fuel vehicles.

I don’t see how the Dodge news could do anything but hurt Tesla’s business. The overpowered, overpriced, grid-powered 2-seat toy market isn’t all that big to begin with, and splitting it in half is even worse. About the only way to brush it off is to assume Chrysler will be incompetent, and given they’ve produced some good hot-rods in the past 50+ years, that seems like a bad bet.