Tesla CEO steps down as possible delays loom

Martin Eberhard becomes president of technology as a former Flextronics CEO takes the helm. An autumn deadline for the Roadster "is not yet fully within our grasp," Eberhard says.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read

Michael Marks, the former CEO of contract manufacturer Flextronics, has stepped in to become the interim chief executive of electric sports car company Tesla Motors.

Michael Kanellos/CNET Networks

Founder and current CEO Martin Eberhard will become president of technology.

The company also acknowledged that it may face more delays in bringing the Tesla Roadster to market. Last July, it was aiming to have a vehicle ready in about a year, then later shifted that date to the fall of 2007. Now another postponement could be in the offing. Eberhard wrote in an e-mail to customers:

"We are still planning to start production of the Roadster by the end of next month and deliver the first cars to customers this fall. We have a good chance of meeting this goal, but to be fully transparent, I want you to know that while it is within our reach, it is not yet fully within our grasp."

Martin Eberhard Tesla Motors

A Tesla spokesman said the company is still planning for the fall release.

The shift is likely taking place so that Tesla can gear up for the challenge of mass manufacturing. The company wants to move into the larger, but in many ways more challenging, market for sedans. With its Whitestar electric sedan slated for 2009, the San Carlos, Calif.-based company will find itself competing against behemoths like General Motors, Toyota and BMW. These carmakers often have to be concerned about price, which is directly related to volume component buying, supply line efficiency and logistics.

With the Roadster, Tesla will compete against companies like Porsche and Ferrari. These are well-established companies too, but it's a different market. Sports car drivers seek out performance, and electric motors have distinct advantages here. Buyers are also less price-sensitive and less concerned about how far a car can go on a single charge.

Marks helped build Flextronics into one of the largest contract manufacturers in the electronics business. The company, though, has recently has faced more severe competition from Taiwanese contract manufacturers. Marks serves as CEO of the company from 1994 to 2005 and remains on the board.

Some former Flextronics execs, such as Malcolm Smith, have been working at Tesla for some time.

The company said it has been working on a succession plan for a year. Marks, however, is only stepping in as interim chief for now.