MotorAuthority

Tesla Motors applies for $400 million government aid

Posted Fri Nov 21 2008 9:28 PM by Ralph Hanson

If approved, Tesla plans to use the aid for its upcoming Model S sedan and battery technology

Fledgling electric car company Tesla Motors has encountered financing problems recently, prompting the firm to apply for a $400 million aid package from the Department of Energy. The DOE has already approved a $25 billion loan package designed to help American manufacturers create more efficient vehicles, but there are rumors that the rules of the loan could be altered to help the Detroit 3 carmakers remain viable.

News of Tesla's $400 million request came directly from the horse's mouth, with Tesla's vice-president of corporate development, Diarmuid O'Connell, hinting that if government aid is not forthcoming then Tesla may have to shut its doors. O'Connell revealed that Tesla had made a last-minute application for government aid in two important projects that it is undertaking - developing "advanced batteries for electric vehicles" as well as developing its new $30,000 volume model, the Model S.

Each project will require around $200 million to finance and would create up to 1,000 jobs in manufacturing, construction and maintenance. According to Tesla, the battery program is especially important as the advanced technology could be used not just by Tesla but other vehicle manufacturers.

O'Connell stated that Tesla was confident of being approved for the loans as the two projects it was undertaking went "right to the heart" of what the $25 billion loan package was intended for. At the same time, O'Connell recognized that the government is "no doubt seeking to modify the rule to allow for the money to be made to simply take care of the Big Three’s cash flow problem" but the extent to which smaller companies such as Tesla would be ignored is still uncertain - for now the green car company has to sit and wait.
Via: Earth2Tech

story Tags:

• Department of Energy
• DOE
• Hybrid-Electric
• Model S
• Roadster
• Telsa Roadster
• Tesla
• Tesla Model S
• Tesla Motors

Reader Comments

• Sat Nov 22 2008 4:36 PM

  Gus says

  Ahh well, at least I can say someday that I drove one.
  I bought a shirt as well, maybe I should put it in a safe place, might be worth something someday!
  Seriously, though, I loved the car, and the promise it held, but with gasoline at under $2 a gallon again the impetus is gone...

• Sat Nov 22 2008 6:29 PM

  mburleigh8 says

  OK, who is next on asking the government for $.

• Sun Nov 23 2008 3:59 PM

  HECTOR says

  Me. And I'm a bargain! At only $50 million dollars I am probably the cheapest bailout for the feds.
  
  Plus I promise to put that money to work right away. Ferrari will be shipping at least one more 599 to the USA and there will be a whole construction crew dedicated to my new house project. And last but not least I will be supporting a few young women and the local party infrastructure.
  
  Bail me out baby!