Tesla gets loan approval from US Department of Energy
Electric vehicle manufacturer will use loans to build an assembly plant for Model S sedan and another facility to manufacture electric powertrains.
SAN CARLOS, Calif.--(BUSINESS WIRE) —Tesla Motors has received approval for about $465 million in low-interest loans from the US Department of Energy to accelerate the production of affordable, fuel-efficient electric vehicles.
Tesla will use $365 million for production engineering and assembly of the Model S, an all-electric family sedan that carries seven people and travels up to 300 miles per charge.
The Model S has an anticipated base price of $49,900 after a $7,500 US federal tax credit. It has lifetime ownership costs equivalent to a conventional car with a sticker price of $35,000, thanks to the lower cost of electricity vs. gasoline and a relative lack of service and maintenance. Tesla expects to start Model S production in late 2011 in a state-of-the-art assembly plant employing about 1,000 workers.
Tesla will use $100 million for a powertrain manufacturing plant. The facility will supply all-electric powertrain solutions to other automakers, greatly accelerating the availability of mass-market EVs. The new facility will employ about 650 people.
Tesla is in the final stages of negotiation for facilities in California.
The loans are part of the Advanced Technology Vehicle Manufacturing Program, which provides incentives to new and established automakers to build more fuel-efficient vehicles. Created in 2007 and appropriated in September 2008, the $25 billion ATVM aims to reduce America’s dangerous dependence on foreign oil and create “green collar” jobs. The program is entirely unrelated to the stimulus package or the so-called “bailout” funds that General Motors and Chrysler have received.
“Tesla will use the ATVM loan precisely the way that Congress intended -- as the capital needed to build sustainable transport,” said Tesla CEO and Product Architect Elon Musk. “We are honored that the US government selected Tesla to be among the first companies to participate in this progressive program.”
Building on Proven Technology
The Model S sedan features exceptional performance, styling and utility, with unrivaled cargo and passenger space. Its floor-mounted powertrain is the culmination of a half-decade of engineering in the heart of California’s Silicon Valley, where Tesla developed the Roadster.
The highly acclaimed Roadster is the first production battery electric vehicle to travel more than 200 miles per charge and the first US- and EU-certified Lithium-Ion battery electric vehicle. With an estimated range of 244 miles per charge and zero tailpipe emissions, it’s the first production vehicle to offer supercar performance with a clean conscience.
Tesla has never applied for federal funds for the Roadster, an American sports car that consumes no gasoline whatsoever. Tesla expects the Roadster business unit to be profitable in the third quarter. Privately held Tesla will finance sales and marketing for the Model S through private capital.
Teslas do not require routine oil changes or exhaust system work. They have far fewer moving (and breakable) parts than internal combustion engine vehicles. They qualify for federal and state tax credits, rebates, sales tax exemptions, free parking, commuter-lane passes and other perks. The Model S costs roughly $5 to drive 230 miles – a bargain even if gasoline were less than $1 per gallon.
The Model S, which carries its charger onboard, can be recharged from any conventional outlet. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge. Tesla is taking reservations online and at its two showrooms in California.
Tesla will expand its network of showrooms this summer with stores in New York, Chicago, Seattle and Miami. Tesla will open its London showroom June 25, followed by Munich and Monaco. Additional stores will be opened in Washington DC and Toronto.