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