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 electric sports carmaker has now revealed that without the loans the introduction of its Model S sedan will have to be delayed.

Speaking with the Detroit Free Press, Tesla CEO Elon Musk said that a planned $250 million factory in San Jose, California, cannot be opened on time without the aid. "We can't move forward with that without a major amount of capital," Musk said. "If we don't get any government funding, then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now."

The new facility will produce the Model S, a four-door sedan model that will be priced at $57,499 and designed to compete with cars like the Lexus GS 450h and Mercedes Benz E-Class diesel. With the aid, Musk said that Tesla would be able to sell up to 20,000 Model S sedans per year by as early as 2011.

Tesla is hoping to get a piece of the $25 billion reserved by the federal government to encourage the development of energy-efficient vehicles by American firms. Lawmakers and the Bush administration are currently debating on how to distribute the funds.