Skip to comments.Tesla gets long-awaited government loan
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 Teslas next-generation sedan, the Model S. The sedan will sell for around $45,000, thats 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 governments guarantee. When it was unable to find an appropriate site in San Jose, it abandoned plans there and focused instead on the LA-area.
Teslas 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.
The current business model nowadays seems to be producing a product that is otherwise economically infeasible without a government subsidy.
this from wiki: “Production for the retail market is expected to begin in mid 2012, with a base price of US$57,400. The base model will have a range of 160 miles (260 km) when fully charged, and a 0 to 60 mph (0 to 97 km/h) acceleration of 5.6 seconds.”
That’s actually getting close to an actual useful car. get the price down to 40k without a rebate or subsidy and the range up to 250miles...and then they have something useful.
Insanity rules....Obamanomics in action.
I live in one of the most populated areas of the country, and spend a few hours each working day driving all over my state and I have never seen a Tesla car. So Tesla and Solyndra together is $1 billion dollars in payoffs to cronies.
Isn’t Al Gore a big stockholder in Tesla? So I’ve heard.
This is the one key element of the story that you have to laugh about. Who starts a business today in California? On labor costs alone...I’d be in Georgia or Alabama. This is an attempt to simply spice up a government loan and have a certain smell to it (like California jobs). It’s another born failure in the waiting. They paid some money to the campaign of 2008, and promised more for 2012....to get this loan, which is really a dumping of government capital down a pit.
The tesla car cost over $100,000 dollars and only has two seats.
Who the hell can afford it other then government.
I'll bet he was given the shares in exchange for "consulting".
You specified two points. Good ones. Neither were met.
See here for a photo: I am sure the average american paying for this can afford it - far from the henry ford business model.
Kiss of Death
Look for another year of high executive salaries and big bonuses at Tesla, followed by bankruptcy. Sort of like “The Producers”, except with a whole lot of our money.
yes, but everytime one of these flaky companies dreams up a new miracle car, they actually get a little closer to pulling it off. I think in another 20 years someone will actually do it.
I’ve done similar math for the VOLT...and the Tesla will pay for itself in 400k miles, assuming no battery changes...at the 45k price. Word is it will really be 50k. So, if you drive a car 20k miles a year, in two decades, you’ll be cash ahead....excluding the higher cost to insure and tag a 50k vehicle. Only government would throw half a billion at this turkey - plus a subsidy on every sale.
You do manufacturing where the labor is cheaper, but you design where the pool of talent is amazing.
The Bay area of California is simply rich with brilliant engineers and programmers.
Can I ask a stupid question?
Why is the government giving loan guarantees to private businesses in the first place?
Even if you worship at the altar of Al Gore and all things green, how is it legal to give loans to companies in “green” businesses, but other businesses have to go to a bank or private investors for financing? When did we get into the green socialism business in a big way????
Can I also ask if Tesla Motors has presented financial statements and budgets and such, to see if they have any hope of repaying this loan?? Is that a stupid question in light of what happened with Solyndra????? Are all the t’s crossed and i’s dotted on the contract???
So where are these amazing cars with a 200-mile (???) range? In California, you can’t go anywhere in less than 200 miles, unless you live in liblooneyland (SF or LA).
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