The fiscal policies of our government are still somewhat a mystery to me even after a business degree from University. You would have thought that all the economics and finance classes would have shed some light on how companies like GM, Chrysler, Ford, Fisker, and now Tesla, secure millions (if not billions) of dollars from the government. The mystery aside, it was announced that Tesla will be given a $465 million dollar loan from the Department of Energy.

What is the company going to use this sizable amount of money for? According to The Detroit News, Tesla closed on the loan with the Department of Energy in order to fund a new factory in southern California. The new factory is supposed to produce the new Model S that we have been hearing about for a while now. That isn’t all though, some of the money is also delegated for a powertrain manufacturing facility in Palo Alto, CA. That facility is aimed to assemble the battery packs, electric motors and other related components for Tesla electric vehicles.

Tesla Roadster Eco Challenge

Tesla Roadster Eco Challenge

The Energy Secretary Steven Chu said, “This is an investment in our clean energy future that will create jobs and reduce our dependence on foreign oil.” He went on to say that this funding would help build a customer base and lay the foundation for American leadership in the electric vehicle industry as part of a sustained development effort by the government. The thing that wasn’t mentioned in all of this was the repayment terms or timeline. What we do know is that Tesla still projects that it will take another 24-30 months to rollout the Model S to production. At $50,000, after a $7,500 tax credit, we hope it will live up to the 300-mile range; if it does, then the Volt has some serious competition since it can only do about 50-60 miles better on its extended range mode.

Bottom line—Giving our industries a boost is commendable, especially in the name of reducing dependency on foreign oil. The question is, do you—the reader of—believe that the government money is going to the right projects? We know there is funding for Ford and Nissan (especially the Leaf project) and more money requests from GM and Chrysler. Leave us a comment and tell us what you think of the government in fusions under the 2008 federal program, especially considering that there is said to be some $16 billion available to award to other companies.

Be sure to check out more coverage of Electric vehicles at and the recent Mitsubishi i-MiEV coverage at


[Source: The Detroit News]