Electric car maker Tesla is postponing the launch of its planned 'S' sedan model, ramping up Roadster production, closing its Detroit facility to consolidate in San Jose, California, and laying off an unspecified number of staff.

The moves were announced in a memo headed 'Extraordinary times require focus' from chairman, 'product architect' and CEO Elon Musk published on the automaker's website last night.

Musk said Tesla would focus on its two revenue-producing business lines - the Lotus-bodied Roadster model (local media reports said less than 50 of the US$109,000 cars had been delivered to customers to date) and powertrain sales to other car companies.

"In the Roadster, Tesla has a unique product with a large order book that continues to grow, despite softness in the automobile sector. Our powertrain business is profitable today and is also growing rapidly," Musk said.

"Our goal as a company is to be cash-flow positive within six to nine months. To do so, we must continue to ramp up our production rate, improve Roadster contribution margin and reduce operating expenses. At the same time, we must maintain high production quality and excellent customer service."

Musk said there would be a "modest reduction in near term headcount". Local media reports said the company employs 250 people and some internet reports suggested around 200 would be axed but the company reportedly has denied this.

Musk said there would also be "some headcount reduction" due to consolidation of operations. As vehicle engineering is moved to the company's new headquarters in San Jose, it would close its Rochester Hills office near Detroit.

A company spokeswoman told a local newspaper 30 people work at the Rochester Hills facility.

Musk said he would expand his own role at Tesla to CEO while current CEO Ze'ev Drori would remain as vice-chairman "and continue to help Tesla make the right decisions".

Musk said Tesla was "absolutely committed" to development of its next generation sedan, set 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."

The loan guarantee will cover most of the Model S program at a very low cost of capital compared with raising equity financing in what could quaintly be described as a 'bear market', Musk said, adding that the loan funding could only be drawn down after Tesla receives environmental approval for its new 89-acre consolidated headquarters in San Jose.

"If all goes reasonably well, we will receive that approval in Q2 next year.

"The net result will be a delay in start of production of the Model S of roughly six months to mid-2011. On the plus side, we will spend the extra time refining the vehicle design and powertrain technology, so the car will end up being slightly better."

Musk promised current and potential Roadster customers that he would "personally" stand behind the product.

"We are not far from being cash flow positive, but, even if that threshold ends up being further than expected, I will do whatever is needed to ensure that Tesla has more than sufficient capital to get there," he wrote.

He blamed the credit crunch for the company's predicament, writing: "These are extraordinary times. 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."

A US media report said Tesla had raised more than US$100m from various investors. Musk, who founded SpaceX aimed at launching payloads and people into space, invested in Tesla in 2004.

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