Feb. 8 (Bloomberg) -- Tesla Motors Inc., aiming to be the first high-volume electric-car maker, raised an additional $40 million from Silicon Valley investors to ensure production can begin next month, following delays and a management shakeup.

Tesla is closing the ``funding round right now,'' Chairman Elon Musk said in an interview yesterday. San Carlos, California-based Tesla collected $100 million earlier from backers including Google Inc. founders Larry Page and Sergey Brin and venture-capital firms such as Technology Partners.

The cash will help Tesla overcome snags that put deliveries of its $100,000, battery-powered Roadsters six months behind schedule after the company changed to a new transmission maker. Tesla cut its workforce by about 10 percent last month to pare costs as its supplier move spurred other technical changes.

``We did have a burn rate that was out of control last year,'' said Musk, 36. ``The board and I have taken steps to make the appropriate changes in senior management to correct that situation.''

Electronics entrepreneur Ze'ev Drori became chief executive officer in December, replacing interim CEO Michael Marks.

``They didn't understand initially how difficult this business is,'' said Brett Smith, a technology analyst at the Center for Automotive Research in Ann Arbor, Michigan. ``That said, Tesla brings an enormous amount of energy and creativity, that Silicon Valley culture, to this industry.''

Technology Interest

Tesla's 2006 announcement that it planned to sell cars equipped with lithium-ion batteries rekindled public and industry interest in a technology that fell from favor after General Motors Corp. killed an electric-car program in California in 2003.

GM is now developing the Volt sedan, which will be rechargeable at household outlets. Startup Fisker Automotive Inc. says it will sell an $80,000 plug-in sport sedan by 2009. Toyota Motor Corp. last month said it will lease lithium-ion plug-in cars to fleets in the U.S. by 2010.

``It would be too bad for Tokyo and Detroit if they failed, because they are pushing the envelope for advanced technology,'' Smith said of Tesla.

Tesla's Roadster is to go into production March 17 after being certified by the National Highway Traffic Safety Administration. The Roadsters will be built under contract for Tesla by sports-car maker Group Lotus Plc in Hethel, England.

Temporary Transmission

To avoid further production delays, initial Roadsters will be shipped with a temporary transmission that will replaced within a few months, the company said.

Tesla has taken orders for 900 cars so far, with customers each paying deposits between ``$100,000 and $5,000,'' said Musk, a PayPal Inc. founder and Tesla's biggest investor. Deliveries should begin in late April.

Tesla's customers include California Governor Arnold Schwarzenegger and actor George Clooney.

``No one should have concern about the financial viability of Tesla,'' Musk said. ``Even if all other investors were to abandon Tesla -- and no major investor has -- then I would still support the company.''

The car's range on a full battery charge is at least 220 miles (352 kilometers) and it accelerates from 0 to 60 miles (96 kilometers) per hour in under four seconds. The vehicle is powered by 6,800 rechargeable lithium-ion battery cells.

New Fuels

Interest in alternatively powered autos is rising as governments begin taking steps to curb vehicle emissions of carbon dioxide and other gases linked to global warming.

Venture capitalist Vinod Khosla said alternative fuels, not alternative powertrains, are the best way to cut carbon pollution. GM last month invested in a biofuel company that aims to convert waste into ethanol, Coskata Inc., backed by Kosla, the co-founder of Sun Microsystems Inc.

``I'm not thinking of putting money into Tesla,'' Khosla said in an interview this week.

``The world is going to ship more than a billion cars in the next few years,'' Khosla said. ``Tesla's scale will be very small. It's not what you can sell a hundred or a hundred thousand or so of. It's what can you sell 500 million or 600 million of to make a dent.''

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: February 8, 2008 17:09 EST