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Tesla Nabs $465M Government Loan To Build Model S
SignalFreq writes "Tesla Motors, based in San Carlos, California, was approved yesterday for $465M in loans from the Department of Energy's Advanced Technology Vehicles Manufacturing program. Tesla plans to use $365M of the money to finance a manufacturing facility for the Model S (review, Letterman video) and $100M for a powertrain manufacturing plant in the SF Bay Area. 'Tesla will use the ATVM loan precisely the way that Congress intended — as the capital needed to build sustainable transport,' said Tesla CEO and Product Architect Elon Musk. Tesla expects the Model S to ship in late 2011 and the base cost to be $57,400 ($49,900 after a federal tax credit). Ford received $5.9B and Nissan received $1.6B under the same program."
More bullshit courtesy of the U.S. Gubmint!
I know. Just like those silly Interstate highways, the US Marine Corps, the US Postal Service that'll deliver a package of paper to any door in the US within a day or two for an affordable flat fee, and those terribly inefficient and socialized Firefighters and that neo-communist socialized Police Department. Government. Pah! Who needs it?
Drill baby drill - on Mars
Obama socialist?
People who claim that Obama or the American Democratic party for that matter is socialist needs to take a trip around the globe. In many European countries the Democrats would be considered a right wing party.
> I know. Just like those silly Interstate highways
Roads are specifically mentioned in the US Constitution. Pass
> the US Marine Corps
A Navy is specifically mentioned. The Marines are a sub unit of the Navy. Pass
> the US Postal Service that'll deliver
Postal service is permitted. Pass. But note that most packages use private carriers these days, the postal service is mostly for bills and junk mail.
> and those terribly inefficient and socialized Firefighters and that neo-communist socialized Police Department
Those services are not provided by the US government. Federal money for those purposes are unconstitutional. Good luck getting enough literate Supremes to be able to figure that out any time soon.
US Taxpayer money to a private automaker? Fail. Unless you can point me to the clause I missed that specifically grants the US government that power the 10th Amendment forbids it. Again, good luck finding five Supremes who can read.
Democrat delenda est
Tesla is the only company in the world selling production electric cars that are fully street-legal. They started with a $100K car, and now they're doing a $50K car. They have a $30K car planned for after that.
Basically, you need economies of scale to get the cost of these cars down. Tesla's riding that curve, and plans to eventually have cheaper cars than Ford. This is a potentially great place to invest in American innovation, not to mention the environmental benefits or jobs.
Celebrate failure, and then learn from it - Nolan Bushnell
The kind of people who claim that Obama is socialist aren't the kind of people that travel around the globe. Well OK, Gov. Sanford does, but the REST of them...
"I guess the moral of the story is, don't paint your airship with rocket fuel." -- Addison Bain
The technology does not exist yet to make a $25k electric car that can succeed in the American market. Tesla is right to start with the high-price, high-profit end of the market and work their way down to the high-volume mainstream as the technology matures and the supply chain scales up. Trying to start out by making a capable electric car for the mainstream American market is a much riskier move, and requires much more up-front money - hence the much larger handouts that have gone to the more established automakers. Tesla, on the other hand, has already established their electric vehicle business as profitable, and can use their profits and experience from the Roadster to help subsidize the development of the Model S.
just a guess, but it could be because of the 3 manufacturing plants and 1100 dealerships Nissan has in the US.
It breaks my pluginses, my precious!
At $50,000 the Model S is more likely to be used as a fleet car then something you use at home. For those who say this is a waste of money I'd like to point three things out: 1. GM spend 1.2 BILLION to build a PROTOTYPE electric car, which they didn't put into productions. This is money to build a factory that will actually um make cars. 2. Tesla is going to use this money to build electric vehicle components in the US for other companies. Having that kind of production is the US is BIG DEAL for our balance ot trade. 3. Tesla is more likely to pay
Exactly. Tesla's approach is perfectly cogent. Starting a car company is a *huge* expense. Look at what Coda is having to go through to bring a new car to the US -- they mentioned that they still need to crash another *30 to 40 cars* to get certified. And that's just the half of it. There are no volume parts producers for EV components. Look at the Roadster transmission fiasco -- there literally was no multi-gear transmission in the world that would work with their motor, and when they spent a fortune trying to get a company to engineer one for them, what they ended up with couldn't take the stress.
The logical approach, then, is to piggyback as much work as you can onto that of an existing manufacturer (in this case, Lotus), focus only on what's different, and start at the high end so that you can absorb the capital costs into the vehicle price without creating sticker shock. People expect a carbon fiber car that does 0-60 in 4 seconds to be expensive. The fact that low-volume EV drivetrain components are super-expensive doesn't matter there, because so are the low-volume ICE components that they compete against.
This is the next logical step: an independently developed, not-piggybacked, luxury sedan. This means building a large-volume factory, with a chassis developed from scratch that's designed for your EV needs. Of course, this is incredibly expensive. Hence the need to raise a ton of capital. In the middle of a financial crisis. :P
Once they've retired that risk, even higher volumes/lower prices become realistic. Which is their plan with the Bluestar.
That seems to be the same approach being taken by Fisker. I think a reasonable alternative approach is that being taken by Aptera. Three wheels to skirt the federal requirements, but put a heavy *independent* focus on safety, with a vehicle that's so uber-streamlined and lightweight that it simply doesn't need a powerful drivetrain or large battery pack to perform well. Hence they can start at near the bottom of the market, where there is a lot less competition. Once they're rolling off the lines, you can expect to see from them what Tesla is doing now -- raising large amounts of money to build a factory for a more mainstream, higher volume sedan (although they'll almost certainly keep their extreme-efficiency focus).
I tore these out of your symbol, and they turned into paper.
I don't particularly care whose district it's in; I'm just glad the gov't. is loaning money to a company that A.) has a good chance of paying it back and B.) develops a technology that decreases our dependence on oil.
Although I don't doubt that there are political reasons for having some Tesla mfg in the US (not to mention tariffs, etc) there are also some practical ones:
1) You can't just take some laid off Mexican auto assemblers from an old GM plant, put them in a new building and tell them to start making Electric car drivetrains -there are probably entirely new process steps (not to mention components) which would make this a non-starter
2) they probably need to tweak that process as well as being able to introduce changes in parts as the design is tested and improved
therefore it makes sense for the factory to be close to where design/engineering takes place -not to mention that there is also a highly trained, technologically able workforce in the Bay Area.
Also, thanks to Hitech, Lockheed, Lawrence Livermore Labs, etc there are a great many machine tooling shops in the area which are second to none.
Think of this as a pilot mfg plant -they will no doubt try to go somewhere cheaper when it comes time to produce quantities in the 100ks
On the other hand, we have the only large scale auto manufacturing plant left on the West Coast just down the street from me: http://www.nummi.com/ , so stranger things have happened.
-I'm just sayin'