DOE Closes $465 Million Loan to Tesla Motors
January 21, 2010
DOE announced on January 21 that it has closed its $465 million loan with Tesla Motors, Inc. for the construction of two manufacturing facilities, one in southern California for the Model S electric sedan and one in Palo Alto, California, for electric powertrains. The Palo Alto facility will assemble electric vehicle battery packs, electric motors, and related electric vehicle control equipment, both for Tesla's own electric vehicles and for sale to other automobile manufacturers. Tesla's planned all-electric Model S has a base price of $49,900 and is being designed to offer a variety of range options depending on the battery pack used, from 160 to 300 miles on a single charge. Volume production of the Model S will begin in 2012 with a target production capacity of 20,000 vehicles per year by the end of 2013. According to Tesla, the Model S project and powertrain manufacturing facility are expected to create more than 1,600 jobs.
The Tesla announcement marks the second loan agreement signed by DOE with an advanced technology vehicle manufacturer, following a $5.9 billion agreement with Ford Motor Company in September 2009. DOE has also signed conditional commitments with Nissan North America, Inc. and Fisker Automotive. Tenneco Inc. became the first advanced technology component manufacturer to obtain a conditional commitment from DOE in October of last year. Nissan plans to build electric cars and battery packs at the company's Smyrna, Tennessee, manufacturing complex, while Fisker recently announced plans to build plug-in hybrid electric vehicles by reopening a shuttered GM plant in Wilmington, Delaware.
Congress appropriated $7.5 billion to DOE to support up to $25 billion in loans to companies using U.S. factories to make cars and components that increase fuel economy at least 25% above 2005 fuel economy levels. DOE plans to make additional loans over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain. The intense technical and financial review process is focused not on choosing a single technology over others, but is aimed at promoting multiple approaches for achieving a fuel efficient economy. See the DOE release and the Model S page on the Tesla Motors Web site.