Tesla's $465M Loan to Speed Development of All-Electric Sedan
Tesla Motors’ plans to build a $57,400 all-electric sedan will move forward now that the company has secured $465 million in federal loans.
Tesla, Ford Motor Co. and Nissan North America became the first recipients of a $25 billion federal loan program aimed at helping automakers develop and produce more fuel-efficient vehicles. The three will receive a combined $8 billion in loans, Energy Secretary Steven Chu announced today.
Tesla CEO Elon Musk said in December the fledgling electric car manufacturer couldn’t build the San Jose, Calif., plant where the sedans were to be produced without a major capital infusion; if the federal loan fell through, Tesla would push back the sedan’s introduction again.
Instead the company will dedicate $365 million of the loan funds toward producing the Model-S, which has a driving range of between 160 and 300 miles per charge, depending on the battery pack, and the capacity to carry seven people. Production will likely commence in late 2011.
Production of the Tesla Model-S sedan will move forward with the help of a $465 million federal loan.
Tesla will use the remaining $100 million to build a California manufacturing plant that will produce battery packs and electric drive trains for its own vehicles, as well as for other automakers. Tesla also produces the $110,000 Roadster, 500 of which have already hit the streets.
Tesla and the Dept. of Energy (DOE) predict the company will produce up to 20,000 Model-S sedans by late 2013, the same year in which its battery pack plant will crank out up to 30,000 units annually.
Meanwhile, Ford snagged the lion’s share of the loan guarantees announced today, with $5.9 billion it will use to retool 11 manufacturing plants in five states, including two former truck plants that will be converted for car production. The company plans to build more efficient versions of several well-known models, including the F-150, Focus, Escape and Taurus.
Nissan scored $1.6 billion in low-interest loans to build a new lithium ion battery plant and upgrade an existing facility at its Smyrna, Tenn., manufacturing center. Groundbreaking is planned for late 2012. Nissan expects the plant will churn out 150,000 electric cars annually, while the battery plant will have the capacity to produce 200,000 units every year.
Nissan will introduce an electric vehicle to the Japanese and American markets next year, but the cars will be made in Japan initially. Other auto companies are following suit with their own electric vehicles in the coming years, including Mitsubishi Motors’ i MiEV in July and GM’s Chevy Volt in 2010, among others.
By 2015, Pike Research predicts there will be more than five million charging stations throughout the world that will support this emerging electric vehicle fleet. The research firm believes China will account for the largest portion of charging stations -- nearly half the market -- with the U.S. representing the second-largest market with more than one million charging stations.
The loan guarantees announced Tuesday are made available through the DOE’s Advanced Technology Vehicles Manufacturing Loan Program, which targets automakers and suppliers that develop vehicles that are at least 25 percent more fuel efficient than 2005 fuel economy levels.