Tesla: yet another troubled car company

Facing trouble raising money (and other problems), Tesla Motors today confirmed cancellation of its planned San José factory. The factory was only announced four months ago, and — in the light of the high government subsidies and deteriorating US economy — seemed dubious even then.

The scoop was researched Wednesday and reported Thursday by the San Jose Business Journal.

As also reported by the Merc this afternoon, the nominal reason for the cancellation was government loan conditions, although the company earlier announced (and then cancelled) plans for a New Mexico factory.

Tesla today still has two dealerships, one in Menlo Park (for Silicon Valley gazillionaires) and Santa Monica (for eco-conscious movie stars). While normally a good strategy for cutting-edge technology — let alone cool sports cars — nowadays California is a bad basket to put all your eggs in. The Merc also reported that 2008 new car sales in our state fell 23% in one year, to the lowest levels seen in 15 years.

OptiSolar: one day, -48% growth

On the 11pm news, one of our local TV stations profiled two local PV companies: one with bad news, one where the news so far is OK.

The bad news was at Hayward-based OptSolar, which is laying off about 300 of its 600 workers. The company’s press release page hasn’t been updated in 5 months and only 2 in 2008. However, press releases are not their thing: the company has long been in stealth mode, with only occasional glimmers of information.

On the TV story, a OptiSolar spokesman is quoted as saying “The economy and access to capital markets have hit us hard.” The best coverage was in the hometown Hayward Argus (sister paper to the San Jose Mercury), which gives the exact numbers as 290 cut and 317 remaining. The paper quotes spokesman Alan Bernheimer as saying

"The major effect of this decision is it suspends our high-volume manufacturing," Bernheimer said.

...

"In this capital market, we just couldn't finance the costs for our expansion," Bernheimer said. "The current work force simply wasn't sustainable. Our expansion was dependent on access to the capital markets. And those dried up starting last September."

Richard Helfrich, managing director of Alamada Capital, was quoted on TV as saying “I thought they would be one of the survivors because they had access to a lot of capital.”

KABC reported that the second company —  SolarCity of Foster City — had raised enough cash in 2008 to stay alive at least for now. Certainly that’s the experience of most early stage Bay Area tech companies right now: if got money, you’re happy, but if you didn’t get money in time, you have to assume that it won’t be coming for a while (if ever).

The difference here is that with the change of regimes, renewable energy (and other cleantech) firms are hoping for a big flood of Federal support for “green” technologies. Will that be R&D subsidies? Purchase subsidies (like tax credits)? And will they come in a form to help capital-strapped firms launch new products, or only to provide cash flow to firms that have products ready to sell?

Get a charge out of this news

The late TV news Tuesday offered a brief snippet about how San Jose is encouraging the installation of free electric vehicle charging stations.

The video clip included the San Jose mayor, Chuck Reed, who like other politicians wants to wrap himself in the popularity of AEVs. The announcement won free publicity for Coulomb Technologies and its ChargePoint network, as well as Richard Lowenthal, CEO of the Campbell-based company.

The near-term impact of these installations will be minimal. Even here in the Bay Area, CBS 5 estimated there are only about 1,000 electric vehicles. A quick check shows that there are 4.3 million vehicles here, or EVs accounting for less than a quarter-percent.

Of course, there is a huge chicken and egg question for true ZEVs, both EVs and also FCVs. So leading the market (to a certain level) makes sense, but obviously we need a larger pool of EVs in consumer hands to justify more stations. (My sense is that PHEVs will not generate any demand for the stations). If we don’t get cars and drivers, then these stations will whither away they did after the EV1 fizzled out.

Ringing in an EE/RE new year

As part of the New Years’ celebration, I spotted two interesting EE/RE milestones that were integrated into the traditional American celebration of the holiday.

First, to mark the most famous US New Years’ Eve celebration, the Times Square Alliance this year has gone EE with an LED-illuminated ball, featuring 32,256 LEDs and 2,668 Waterford Crystals. The ball was programmable to display different patterns, and the ball will be on display year round.

Secondly, a RE car played a prominent role in the Rose Parade, America’s biggest and most watched parade (three simultaneous broadcasts here in the Bay Area). To lead the parade, Honda supplied its fuel cell-powered FCX Clarity, part of a major promotion effort to mark its 50th anniversary of US operations. The car is currently being leased in limited quantities in the Los Angeles region.

The FCX is obviously a reputation builder rather than a major product in the near term, but clearly Honda made millions of people aware of the reality that fuel cell vehicles are not only possible but here.