Tuesday, January 15, 2008

Investor Sentiment Ch 1 - Some rapid change in the winds of startup automotive

So do you want the good news or the bad first?

Let's start with the bad:

This in from the daily rag, Siliconvalley.com
"Good Morning Silicon Valley"
Article Launched: 01/11/2008 01:33:21 PM PST

"Latest Tesla spin leaves a trail of bodies
That's not oil on the floor of the Tesla garage -- it's blood. This week, with an understandable lack of fanfare, the ambitious electric car company has been dropping employees behind it like pieces of a blown transmission -- about two dozen so far, including three senior executives. According to those in charge, it's all about performance, or the lack thereof. The company is already a year behind in its plan to put a $100,000, zero-emission roadster on the street, and buyers on the waiting list have been told the first production models will come with an "interim" transmission that will get you from zero to 60 in 5.7 seconds instead of the originally touted sub-4 seconds....."

Sadly it is true, what started with the ouster of the founder and CEO, Martin Eberhard, a couple of months ago, has continued and spread to a cleaning house throughout the rest of the Company. I knew several of these people and am quite sad to see this change in the state of affairs. On the other hand, for the sake of our automotive industry and its transformation, it is critical that Tesla (and others) succeed; therefore, if trimming size of its workforce is part of an eventual path to success, then I would say that it is the necessary and better of two evils.

And now for the good news:

Electric-Car Firms
Get Star Investors
January 14, 2008; Page A2

"DETROIT -- The race to develop an electric car is heating up and drawing increasing interest from the same venture-capital investors who helped build Silicon Valley.

The latest entrant is expected to be announced today at the North American International Auto Show in Detroit when Fisker Automotive Inc. unveils an $80,000 battery-powered luxury car it aims to begin delivering in late 2009. The Fisker Karma, a so-called plug-in hybrid, can go 50 miles on electricity before a small gasoline engine kicks in to generate electricity to charge a lithium-ion battery pack on board. The company has backing from Kleiner Perkins Caufield & Byers, perhaps Silicon Valley's best-known venture-capital firm and a backer of household tech names such as Netscape Communications, Amazon.com Inc. and Google Inc."

So unlike the Tesla news of late, Fisker's announcement is all roses...and perhaps in reality it is. In actuality, the announcement is really a joint venture of Fisker Coachbuilding and Quantum Technologies. While it is also a bold vision for a product, I have to question how Fisker is planning to sell and service the product. Perhaps the company can brush away such practical questions in favor of the small volume, but then I question whether such a company is game changing or landmark. Whatever the answer to this "nitty" question :) This is a good day for Fisker/Quantum and also a good day for all of us in the startup position in the automotive world.

The winds are blowing hard so we at Local Motors are battening down the hatches and trimming for the fastest point of sail!


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