Tesla's All-Electric Sedan gets $465M Loan to Speed Development.

Motors Inc. closed Thursday on a $465 million low-cost Energy Department loan to build a factory in southern California to produce its $50,000 Model S electric sedan and a powertrain manufacturing facility in Palo Alto.

The Palo Alto facility will assemble electric vehicle battery packs, electric motors and related electric vehicle control equipment for Tesla's own electric vehicles and for sale to other automobile manufacturers.

"This is an investment in our clean energy future that will create jobs and reduce our dependence on foreign oil," said Energy Secretary Steven Chu.

"It will help build a customer base and begin laying the foundation for American leadership in the growing electric vehicles industry. This is part of a sustained effort to develop and commercialize technologies that will be broadly deployed throughout the American auto industry."

Tesla's planned Model S will use no gasoline, produce no tailpipe emissions and will have up to a 300-mile range. Volume production of the Model S is planned to begin in 2012 with a target production capacity of 20,000 vehicles per year by the end of 2013, the department said. The $50,000 price is after a $7,500 federal tax credit.

According to Tesla, the Model S project and power-train manufacturing facility are expected to create more than 1,600 jobs.

Tesla CEO Elon Musk said at the North American International Auto Show in Detroit last week that the company had produced its 1,000th roadster, less than two years after it built its first in February 2008. He said it would take 24-30 months to produce the first Model S from the beginning of plant construction. The company has signed a lease for its new facility.

The Energy Department, which has already approved loans to Ford Motor Co., Fisker Automotive Inc. and Nissan Motor Co., said it 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."

In October, Tenneco Inc. became the parts company to win an Energy Department loan, getting a $24 million award.

Source: Detroit News