Tesla Motors Chairman, CEO and Product Architect Elon Musk, at the wheel, right, and chief designer Franz von Holzhausen take the prototype Tesla Model S all-electric 5-door sedan for a spin after its unveiling in Hawthorne, Calif., Thursday, March 26, 2009.
A day after the company announced that a drop in the cost for materials to make their signature electric Roadster sports car, Tesla is getting a loan from the government.
The Energy Department said Tuesday that it would lend $5.9 billion to Ford Motor Co. and provide about $2.1 billion in loans to Nissan Motor Co. and San Carlos, Calif.-based Tesla Motors Inc., making the three automakers the first beneficiaries of a $25 billion fund to develop fuel-efficient vehicles.
Energy Secretary Steven Chu made the announcement at Ford's Research and Innovation Center in Dearborn.
While Ford and Nissan will get the majority of the sum, Tesla will get $465 million in loans to build electric vehicles and electric drive powertrains in California.
The loans were designed to help auto manufacturers meet new fuel-efficiency standards of at least 35 mpg by 2020, a 40 percent increase over current standards.
Tesla will use $365 million for production engineering and the assembly of the Model S sedan, an all-electric vehicle that is expected to travel up to 300 miles per charge and go on sale in 2011. It will use $100 million for a powertrain manufacturing plant expected to employ 650 workers.
Tesla CEO Elon Musk said the automaker would use the loan "precisely the way that Congress intended -- as the capital needed to build sustainable transport."
The company had ambitions to build a plant in San Jose but in January nixed the plans because the $100 in venture capital funds fell through.
Tesla said it is looking at other sites in the Bay Area and Southern California that are more financially attractive. Company officials said they still plan to begin producing the new sedans in 2012.
The all-electric Roadster — which retails at $109,000 — is sold out through November. The company said in February that they had sold about 200 Roadsters to date.
Tesla, named for Nikola Tesla, a pioneer in developing efficient uses for electricity, was founded in 2003 with $40 million in venture capital from investors such as Google co-founders Larry Page and Sergey Brin.