At Tesla, we have decided that the wise course of action is to focus on our two revenue producing business lines—the Roadster 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.

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 that Tesla will trim some headcount to help in “raising the performance bar,” as well as from consolidating some operations.

Musk also said that while Tesla is “absolutely committed” to development of the Model S sedan, targeted to be unveiled early next year, the company was reducing activity on detailed production engineering, tooling and commitments to suppliers until a Department of Energy loan guarantee becomes effective.

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.