Posted on 09/14/2011 8:08:22 PM PDT by artichokegrower
Tesla Motors, makers of the first electric car that can travel more than 200 miles between charges, got its $465 million loan guarantee from the government Tuesday. Tesla has been banking on the guarantee for more than two years. The guarantee essentially insures the San Carlos-based company can borrow the money from financial partners to build a factory to produce for Tesla’s next-generation sedan, the Model S. The sedan will sell for around $45,000, that’s with a $7,500 tax credit from the government, and is about half the price of its first production vehicle, the high-end Tesla Roadster.
Tesla had struggled to raise money this year as banks essentially stopped lending amid the credit crisis and recession. Tesla Chairman Elon Musk essentially bankrolled the company with his own money through the beginning of the year. Tesla then signed a deal with Daimler AG, which took a 10 percent stake in the company in May. The Department of Energy had indicated that strategic partnerships with credit-worthy companies would be a major advantage as it evaluated to which companies it would award loan guarantees.
Tesla looked at building a factory in San Jose, which aggressively courted the company. But according to terms of the loan guarantee had to find a brownfield site – essentially a former factory it could retrofit — if it wanted to use the government’s guarantee. When it was unable to find an appropriate site in San Jose, it abandoned plans there and focused instead on the LA-area.
Tesla’s award was part of $8 billion the government said today it would award for advanced vehicle technologies. Ford Motor Co. (NYSE: F) will get $5.9 billion to transform factories across the country to make more fuel efficient vehicles. Nissan North America got $1.6 billion to retool its Smyrna, Tenn. Factory. Tesla will use part of the money it raises to manufacture drivetrains for its cars, Daimler and possibly other companies.
By supporting key technologies and sound business plans, we can jumpstart the production of fuel efficient vehicles in America,” said Energy Secretary Steven Chu, in a statement. “These investments will come back to our country many times over – by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions.”
The Advanced Vehicle Technology Program is part of the $789 billion economic stimulus package the federal government passed in January.
But Tesla had applied for the government prior to the passage of the stimulus package through a program under the Bush administration that was never funded.
Didn't say that. But there are other places than Silicon Valley with lots of smart folks who know far more about heavy motor controls, heavy batteries, etc. Some worked for my former company, which was not a production company, in Texas. I think my point is made by the extremely high price they are showing for the cars. As someone else said, hardly the Henry Ford business model. And more to the point, hardly the sort of thing leading to widespread adoption of such vehicles.
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