So it's nice that Musk has such lofty goals. Frankly, it's always been his forte. He leaves the "how to get there" to other, more little people. Like with an idea to build 100,000 cars per year by buying an idled assembly plant from a U.S. automaker. He'll leave the whole "design a mid-size sedan for it to build" to other people. Musk's an "idea man," ya know. And for an "idea man" the reality of building 100,000 mid-size sedans is kind of like trying to build a "kabillion" mid-size sedans — they're both impossible numbers when you don't even have a working design.

He also thinks gas should cost $10 a gallon. Hmm, we wonder why. Keep in mind it's not that we disagree with Musk, we just happen to believe it's also probably the price-point in which a $100,000 Tesla roadster becomes a good investment versus a sports car with similar performance. [CNet, Twitter]

Morgenstern runs Valor Equity Partners, which led a $40 million investment in Tesla in February 2008 and controls a seat on the board. The badly mismanaged electric-car startup quickly blew through Valor's money; by October, it was down to $9 million in cash. Despite raising more money from investors, Tesla is running on fumes, and collecting deposits for its Model S electric sedan, a car which exists only as a barely drivable quasi-prototype. Tesla requires hundreds of millions of dollars more than it has to make the Model S a reality — which is why Morgenstern's talk of new money is so interesting.

Morgenstern is briefly visible in the video, apparently recorded by an unknown Tesla fan who hopped in with Morgenstern when offered a test drive, and his face matches another published photo. A Mexican restaurant in Highland Park, a suburb north of Chicago, briefly appears in the shot. According to public records, Morgenstern's family foundation is based in Highland Park. The car is one of Tesla's Founders Series, the first built, and Morgenstern has been reported as one of the buyers in that series. He did not return a message left for him at Valor.

As he pulls away from the restaurant, Morgenstern takes a call and mentions that he's driving around Highwood, a nearby suburban district. During the ride, Morgenstern took a call and discussed Tesla's finances, including rumors previously reported in Valleywag that Tesla was about to take money from a strategic investor. Morgenstern expressed confidence that the deal would be announced Monday or Tuesday. Other sources Valleywag spoke to are less sanguine. Tesla CEO Elon Musk is loathe to surrender control of the company to someone — and yet a new investor would be understandably reluctant to invest if Musk's replacement as CEO weren't a condition of the deal.

So here's the question: Is the video a genuine scoop — or a hoax staged by Tesla?

It does seem curious that Morgenstern's phone just happened to ring seconds after he starts cruising down the street. But if it's a hoax, it's a very foolish one. For one thing, investors don't like their deals getting leaked before the ink is dry. A leak like this, if intentional, may well scuttle the deal, or weaken Tesla's negotiating stance.

And then there's this: Morgenstern uttered something particularly damning on the phone. He said the investment will "make people believers that the sedan will be produced."

Not, mind you, actually allow Tesla to produce its new Model S. It will merely make people believe that it will. That could be read as encouraging optimism among potential buyers. Or it could be read as an intent to deceive people into handing over deposit money for a car that Tesla currently cannot build. Would he really have said that if he knew he was being taped?

Mostly Letterman wanted to know why Detroit's big car companies didn't come up with mass-market electric cars, and whether Tesla's Roadster really would save the planet. (He made a good point about carbon emissions from coal-fired electrical plants.)

But Letterman, when he let Musk get a word in edgewise, let him off easy. He didn't quiz Musk, for example, on whether the Model S show car Musk drove on set was the real thing. According to Dan Neil at the Los Angeles Times, it's not. The slapped-together prototype, a rebuilt Mercedes with a Tesla-designed powertrain, is "just barely ambulatory — more like a glorified golf cart than a harbinger of tomorrow tech," Neil wrote. And Tesla executives confessed to Neil that the car was far from being finished in its design, let alone production.

Here's another thing Letterman should have asked about: How is Musk going to build the Model S? Even if Tesla gets the $350 million in government loans it's hoping for — far from a sure thing — it will fall hundreds of millions of dollars short of the real cost of bringing the Model S to market. An insider tells us Tesla is about to close a new round of financing from a so-called "strategic" investor — that is, some industry powerhouse, rather than a traditional financier. Tesla almost ran out of money last fall, and has run on fumes since then, despite raising a $40 million round of convertible debt from existing investors.

Any new money will mean handing a large stake to the new investor. Daimler, which already has a deal to buy parts from Tesla for its own electric car, is a strong possibility. But will they leave a hothead like Musk, with his habit of stretching the truth, in charge? That's what Letterman should have asked — not if electric cars will come to market, but if Musk will be the man to do it.

More from the segment:

Lacy conducted an interview with Musk that appeared last Friday. But instead of probing Tesla's uncertain future, she invited Musk to talk about the past. The column that sparked his outrage, published last November, asked whether taxpayers should subsidize a company which makes $109,000 electric sports cars for the wealthy. Musk claimed that the Times had retracted the story. In fact, the newspaper had corrected a minor bit about Tesla's application — still not granted yet — for $350 million in government loans. Randall Stross, a San Jose State University professor and Times contributor, initially wrote that the loans would go to the production of Tesla's expensive Roadster, as opposed to funding its vaporous plans for a $57,400 sedan, the Model S.

The New York Observer has the he-said, she-said between Times Sunday Business editor Tim O'Brien and Lacy, a former BusinessWeek reporter who freelances for TechCrunch, Yahoo, and other publications. Here's O'Brien:

I think Sarah Lacy was too busy giggling to do Journalism 101 and call Randy or me for comment to make sure what Elon was saying was accurate. Because it was not only inaccurate, it was flat-out wrong. We wrote a clarification of the headline. We didn't retract the story at all; we stood firmly by the story, and I still stand by Randy's column. You can't help but watch that interview and marvel at the squishy familiarity between Lacy and Musk. And I wonder whether or not some journalistic blinders had popped off.... It was so ridiculous that it was entertaining. It was so misguided and inaccurate and I was stunned at the poor quality of the journalism.

Lacy's response:

I think it's embarrassing that The Times would try to throw me under the bus because they did shoddy reporting that they wound up correcting. If they want to throw me under the bus to make up for their own column that they massively rewrote, you know, go for it.

Actually, that was an error, too. As the Observer notes, the Times removed one sentence from the story and rewrote another.

In her defense, Lacy implied that the Times was sexist for criticizing her. But then she goes on to defend herself on the grounds that she's a girl:

I think everyone has their own style in journalism. Look, I'm a girl from the South! Sometimes I laugh. Someone can pejoratively call it giggling. But if you look at the body of my work, I ask lots of hard questions, and break a lot of hard news.

Another error. If you look at the body of Lacy's work, you'll see a pattern of oblique references to unspecified insider knowledge trotted out after someone else breaks a story. Lacy knows far more than she reports, she always implies — and yet this knowledge never seems to make its way out to the public in a way that benefits the reader.

Lacy is right that the Times is making a lame critique of her journalism. Here's what the Times should have said.

First of all, it ought never have corrected the story. Because the truth of the matter is that if Tesla persuades the government to give it loans, it will in fact spend at least some of that money on ongoing production of the Roadster. It plans to open several expensive new showrooms in the U.S. and Europe. Until late 2011 at the earliest, those showrooms will have nothing but the Roadster to sell. If the Roadster is profitable now, it is barely so. Tesla's overhead will almost certainly have to be funded through the loan proceeds.

A tipster, who's given us inside info on Tesla before, has sketched the back-of-the-envelope numbers for what it will cost to get the Model S sedan into production and thinks, even with the loans, Tesla's more than $500 million short of what it needs. The Model S "prototype" Musk showed off last month was a "show car": a one-off model of what a car will look like, but far from a finished design that can be sent into production. The tipster thinks the earliest Tesla can go from concept to delivery is 2013 — not 2011, as Musk promises, which means another two years of peddling high-end sports cars for the wealthy, as some "douchebag" dared to point out.

Here's the tip:

The untrained observer and the Government may be persuaded by typical industry show car building tricks, but insiders and auto experts know that the Model S that was revealed was a reworked Mercedes CLS. To top it off the components and parts on the vehicle are not even those ever considered in the design.

The fact is Tesla had an agreement with an OEM [original equipment manufacturer] to use their off the shelf parts in the model S. Unfortunately that agreement expires in 2010, a good three years before Tesla can get the Model S engineered (assuming they get federal money). No other OEM has been willing to give Tesla the rights to buy parts or component CAD to design to, hence Tesla would need some additional $300M to develop all of the necessary hardware (suspension, air bags and sensors, modules etc.)

Cost:

D&R the Model S $250M
Build the Factory $300M
Components to put in the car $300M
Retail outlets $50M

Asking Musk about that would have made for a fascinating interview, though Musk probably would have lobbed his insults at Lacy rather than Stross. When we asked Musk about whether he was going to personally guarantee the deposits his company's collecting on those Model S sedans, this is what he said:

I'm not going to answer your questions until you start caring more about creating a truthful picture of Tesla. I know you think you are doing good by offsetting what you see as positive spin with negative spin, but that doesn't count as being honest.

That's the moral universe of Elon Musk: Only positive spin counts as "truthful." Lacy seems very comfortable in that world.

Rose has deleted the pictures after someone at Tesla requested that he take them down. But Tesla flack Rachel Konrad seems thrilled with the leak, praising Jalopnik editor Ray Wert for his site's coverage of the leak. Here's Konrad's email to Wert (who took issue with recent coverage of Konrad's blogger-outreach strategy):

So was the leak a violation of Tesla's intellectual-property rights, or a "really, really nice job"? It's about as clear as anything at the electric-car startup these days.

For Tesla, any publicity is good publicity. The Model S unveiling is Tesla's last-ditch hope at a future in the business. Although it does not have financing for the production of the Model S, or even a site for a factory to produce it, Tesla plans to take deposits for the $58,000 vehicle from customers, a move at least one Tesla executive deemed fraudulent, prompting his departure.

We asked Tesla CEO Elon Musk who sent Rose the takedown request and he replied, "I think it was your mom." And then added, "By the way, I have a crow sandwich coming your way soon." Good to know that this standard-bearer of the green revolution isn't working himself to death to launch his new vehicle and still has time to toss playground insults at bloggers.

Sorry boys, the up-skirt shots of future product like the Tesla Model S only work when you're actually going to release the future product. Just sayin'. [World Car Fans]

We're hearing that approximately 90 Tesla employees, or 90% of the Detroit office, was simply let go, and the remaining employees have to make their way to the San Carlos headquarters with no moving costs covered, no increase in salary and no help getting rid of their old homes. Fortunately, the real estate market in Detroit is red-hot, and the cost of living is about the same in San Carlos.... right?

The relevant section from the Tesla pink slip blog-post-of-death below:

There will also be some headcount reduction due to consolidation of operations. In anticipation of moving vehicle engineering to our new HQ in San Carlos, we are 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.

That's right folks, "good communication" is key.

[Photo: James Nielsen/Getty Images]

Tesla is absolutely committed to development of our next generation vehicle, to be unveiled early next year. However, we are going to reduce activity on detailed production engineering, tooling and commitments to suppliers until our Department of Energy loan guarantee becomes effective.

Our translation below the jump.

If they cut back on production engineering, tooling and commitments to suppliers, they are essentially saying they'll show off their prototype but will make no more production plans until they get a federal loan guarantee for their plant in San Jose. This, like everything, is being blamed on the Financiapocalypse.

This actually follows up on some news we heard way back in January that the Whitestar/Model S was toast, despite having seen the Model S mule. Look for a prototype soon and, depending on the market, a production car at some point in the future... maybe. For more on the Valley implications of this check out Valleywag's coverage

[Souce: Tesla Motors]

Jalopnik Snap Judgment: According to Autocar, we should expect to see the Model S sedan in 2010, with the SUV and a four-door coupe arriving around 2015. The word from Tesla is less encouraging, however: The company is hoping to launch the sedan after construction of its new California factory is completed, and they describe the design as “ninety percent” complete. Knowing that the "devil is in the details" — details being at least the last 10% of the design process — and that starting up a factory isn't without its hiccups, we're afraid the Model S may take a little longer to get to market, and any other variants even longer. Of course, with its recent new hires, Tesla could surprise us all. But, although we're hopeful, we've also seen Tesla miss past time deadlines — and continue to miss current deadlines. [Autocar.uk]

Governor Schwarzenegger Celebrates Clean Technology Investment in California, Welcomes Tesla Motors Production to California

Governor Arnold Schwarzenegger today joined with State Treasurer Bill Lockyer and Tesla Motors representatives to announce Tesla's decision to locate its new manufacturing facility for its Model S, Tesla's second-generation vehicle, in California. As part of the state's ongoing commitment to clean technology, the Governor also announced a new program that waives the sales tax on investment in new manufacturing equipment for Zero Emission Vehicles (ZEVs). This program was developed in conjunction with the State Treasurer and the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA).

"Today's announcement is great news for California, our economy and our environment. We want these cutting-edge companies not to just start in California and do their research and development here-we want them to build in California," Governor Schwarzenegger said.

"Tesla's announcement today is just one of many we will celebrate as we implement AB 32 and reach our greenhouse gas emissions reduction goals. I have always said that we must protect our economy and our environment at the same time, and today it is clear that we are once again demonstrating to the world how to do that."

California's green-friendly atmosphere is encouraging clean businesses from around the world to invest in California, stimulating our economy and contributing to the fight against global warming. According to the California Green Innovation Index by Next10, a non-partisan research organization, in 2006 venture capital investment in energy technology companies in California was just shy of $1 billion, more than double the total from 2005.

Last Thursday, the California Air Resources Board (CARB) released its AB 32 Draft Scoping Plan, the market-based roadmap which will guide California toward its greenhouse gas emissions reduction goals. This roadmap will motivate companies like Tesla to come to California and bring their innovation, reduced emissions and thousands of jobs with them.

Last Wednesday, CAEATFA approved a new program that exempts new ZEV manufacturers from paying sales and use tax on the purchase of manufacturing equipment to encourage ZEV manufacturing in California. For Tesla, these incentives will mean millions of dollars in savings when the company invests in building their new plant in California. And if they choose a city that is in an Enterprise Zone, they will save millions more. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees.

Tesla's Model S will be a fully electric, five passenger, multi-use sport sedan with a driving range of approximately 225 miles on one charge. The projected cost of the Model S is $60,000.

"These vehicles can play a big part in helping California successfully implement its groundbreaking laws to fight climate change," said State Treasurer Bill Lockyer, who chairs CAEATFA. "By offering this financial incentive, our goal is to ensure zero-emission vehicles realize their full potential in our state. In the bargain, we believe the policy will bolster our emerging green economy, create good-paying jobs and reduce our dependence on foreign oil. I'm very pleased the policy helped convince Tesla to build its high-performance electric cars in California."

In addition, California's new Alternative and Renewable Fuel and Vehicles Technology Program, AB 118 by Speaker Fabian Nunez (D-Los Angeles), which the Governor signed into law last year, established a new program that will generate more than $100 million annually for development of new technologies, vehicles and fuels. Funding is expected to be available in March 2009.

California's ZEV program is the world's only enforceable requirement for the development and production of zero-emission vehicles. The following state and federal programs support ZEVs:

* Alternative Fuel Vehicle Incentive Program: Offers up to $5,000 for the purchase or lease of alternative fuel vehicles. Battery electric vehicles, such as a Tesla, typically receive the full $5,000 grant.
* High Occupancy Vehicle (HOV) Lane Access: Vehicles are eligible to receive the white HOV lane access sticker allowing them to be driven in the HOV lane with only one occupant. This white sticker is different from the yellow stickers issued to hybrid vehicles in that their availability is not capped at a specified number of vehicles.
* California's Environmental Performance Label: Requires all new cars starting in 2009 to display a sticker to inform consumers about the smog forming and greenhouse gas emissions of each vehicle. Vehicles are scored on a scale of 1 to 10, with 10 being the best. ZEVs will receive a score of 10 for both smog forming and greenhouse gas emissions.
* Federal Tax Incentives for Recharging Stations: A federal tax deduction of up to $100,000 per location is available for qualified electric vehicle recharging property used in a trade or business.
* Local Community Programs: Offers public charging, free parking and supportive building codes for installation of home charging units.
* Low Carbon Fuel Standard: Requires fuel providers to reduce the carbon intensity of transportation fuels sold in California. This first-of-its-kind standard firmly establishes sustainable demand for lower-carbon fuels without favoring one fuel over another. To start, the standard will reduce the carbon intensity of California's passenger vehicle fuels by at least 10 percent by 2020 and more thereafter.