Goodbye Tesla Motors? CEO dropped, layoffs... :(

Production of the Model S in San Jose will be pushed back six months, to mid-2011, said company founder Elon Musk, who also announced that he will assume the role of chief executive officer. He replaces Ze'ev Drori, who becomes vice chairman and continues as a board member.

"These are extraordinary times,'' Musk wrote. "The global financial system has gone through the worst crisis since the Great Depression, and the effects are only beginning to wind their way through every facet of the economy. It's not an understatement to say that nearly every business will be impacted by what has unfolded in the past weeks, and this is true for Silicon Valley as well.''

Instead of trying to raise capital in private markets for the Model S, the company has decided to wait for a federal Department of Energy loan guarantee "at a very low cost'' of capital, Musk said. First, the company must receive environmental approval for its planned 89-acre San Jose plant, which Musk said he expected in the second quarter of 2009.

One Web report Wednesday said half of Tesla's staff would be pink-slipped, but the company denied that. It declined to announce a number, saying a head-count review was still under way, but Musk called the reduction "modest." Tesla employs 250 people.

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