DoE Tosses Tesla a $465 Million Loan to Make Mass-Market Electric Cars

By Allison Bond | June 23, 2009 5:14 pm

Tesla RoadsterThe Department of Energy is handing out nearly $8 billion in loans today, and $465 million of the funds will go to Tesla Motors to produce its Model S electric sedan, the company’s first attempt at a mass-market car. The company already manufactures the Roadster, a high-performance electric sports car. Nissan and Ford Motor Company will receive the other loans; they’ll get $1.6 billion and $5.9 billion, respectively, to help produce fuel-efficient cars.

Nissan will use the funds updating a plant in Tennessee to produce the company’s upcoming electric sedan, and Ford’s loan will help expedite production of cars that go farther on less fuel. Tesla was perhaps the wild card in the funding equation because it is a small startup. The company has delivered slightly more than 500 Roadsters to customers, and the government loan will help pay for a Southern California manufacturing plant for the Model S sedan, due in 2011. A second plant in the Bay Area will make battery packs and electric drivetrains [The New York Times].

These loans are the first to be doled out under the Advanced Technology Vehicle Manufacturing Program, which has set aside $25 billion to defray the cost of producing environmentally friendlier cars. “We have a historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America,” [President Obama] said in a statement. “These loans … will create good jobs and help the auto industry to meet and even exceed the tough fuel-economy standards we’ve set while helping retain our competitive edge in the world market” [Wired.com].

The Department of Energy’s loan to Tesla is a sign of faith in the young company, which has struggled to raise money during the economic downturn. The loan plus Daimler’s recent $50 million investment for a 10 percent stake in Tesla will go a long way in bringing the Model S to market more quickly. [The Model S] has an anticipated base price of $49,900 after a $7,500 federal tax credit, Tesla said in a press release today [BNET].

Related Content:
80beats: What Does GM’s Bankruptcy Mean for Its Much-Hyped Electric Car?
80beats: Obama’s Orders: Detroit Must Build Fuel-Efficient Cars—Starting Now
80beats: Tesla Unveils a “Mass Market” Electric Car, but It’s a Long Way From the Sales Lot
80beats: U.S. Battery Makers Team up to Tackle Their Big Challenge: Electric Cars
80beats: Electric Car Startup Tesla Motors Faces Financial Trouble & High Hurdles

Image: flickr / theregeneration

CATEGORIZED UNDER: Environment, Technology
  • Christina Viering

    Exciting new territory for the auto industry!

  • http://clubneko.net Nick

    I wish they hit Aptera up with some daddy warbucks (i mean daddy taxpayer.. I mean debt?) money to produce their cars, as they are much more efficient than the Tesla models due to their actual aerodynamic design instead of trying to fit an electric engine into horribly designed cars just because the current car shape is the fashion.

  • Gadfly

    Of course, once they ramrod the cap and trade tax bill through you won’t be able to afford to plug one of these babies in to charge it up.

  • YouRang

    If I’m not mistaken the Nissan design is much less aerodynamic yet, presumably because it’s not planned to go very fast anyway. The car I saw on TV last night was a rolling box kinda like that Honda (?) minivan.
    They should have allotted some money to the power companies to install stations where you can park your car and charge it for the same rate as (at least) you’d pay at home except for the minutes used in parking your car. (They’d need to charge a lot extra if you’re not charging and just using the spot for parking (also when you’re done charging and using just for parking, they’d need to charge a lot extra)).

  • Andy Everett

    Most homes could use a small, say 10 HP generator for emergencies. Add one to any electric car and you would never be caught with y0ur batteries down? As a plus, if your house’s electricity went down your car could plug into your house and keep it going?

  • Jason

    With a $50,000 price tag however, I doubt many consumers are going to find it to their liking. While I’m all for the electric car, the electric sedan has to be affordable (within the 20-30k price range) for it to take over the American market. Until it reaches that point it will be in the hands of only very few.

    Not to be a naysayer, just looking at it realistically. I hope the price comes down with better manufacturing and sales. And just for perspective, I spend about $20 a month on gas, maybe more depending upon my driving habits. Double that and say $40 for the average family.

    At $40 a month, you’re spending $480 a year on gas. You’d need to have the car for almost 20 years (if not longer) for it to balance out the costs of gasoline with the price of a regular 4-door sedan. This doesn’t even take into account the increase of your electrical bill.

  • Gerardo

    This has been troubling me for a while… Are electric cars really that “green”? I mean sure, they don’t directly vomit CO2 into the atmosphere, but if you live in an area where the local power company extacts its energy from non-eco friendly sources like oil and coal (which basicaly applies to like 90% of the world population), isn’t charging and driving an electric vehicle the same thing as driving a regular gas-guzzling car?

    If this is true, I think I’d rather wait until hydrogen or solar powered cars are in vogue.

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