Electric-car maker Tesla Motors Inc. said Wednesday it was told by the U.S. Department of Energy that its application for $350 million in government loans should be disbursed in the next four to five months.
The San Carlos, Calif.-based company said the funds will go toward building the factory that will ultimately produce its Model S four-door sedan, which will go on sale in 2011.
Tesla spokesman Rachel Konrad said Tesla has not yet received final approval for the loan, which comes from a $25 billion loan program designed to help automakers retool plants to build more fuel-efficient vehicles.
The company also said it now expects to return to profitability by the middle of the year after its investors agreed to $40 million in new financing in December. The money, which came from its existing investors and will be used to fund day-to-day operations, was twice as much Tesla needed to reach profitability, the company said.
Tesla said its all-electric Roadster — which retails at $109,000 — is sold out through November. The company has sold about 200 Roadsters to date.
"While we have had some cancellations due to buyers experiencing personal financial difficulties, new orders continue to flow in every week from the United States and Europe," said Chief Executive Elon Musk in a written newsletter.
Konrad said the Model S will retail at below $50,000 after accounting for a $7,500 tax break passed last year for people who purchase electric cars. The tax break can also be also be used for partially electric cars, such as the Chevrolet Volt, the extended-range electric hybrid that General Motors Corp. expects to go on sale in late 2010 and retail for $40,000.
Tesla said it will display a drivable prototype of the Model S on March 26 at Tesla's design studio.