• Jun 23rd 2009 at 12:37PM
  • 34
Click above for a high-res gallery of the Tesla Model S

After many months of anxiously waiting, Tesla Motors officially got the word from the Department of Energy that it would the loan interest loans that it was seeking. Tesla and the DOE announced that the California EV maker will get two loans totaling $465 million from the Advanced Technology Vehicle Manufacturing program (ATVMP). $100 million will be used to set up an electric powertrain manufacturing plant to provide components such as motors and battery packs to other automakers.

The bulk of the cash, $365 million, is allocated for production engineering and a factory to build the Model S. Both factories are expected to be built in existing facilities and Tesla is in negotiations for locations in California. Tesla hopes to start production of the sedan by the end of 2011.

Update: Tesla spokeswoman Rachel Konrad let us know that the powertrain plant will produce motors, power electronics, chargers and battery packs for both Tesla branded cars and other customers.

[Source: Tesla Motors]
Photos copyright ©2009 Drew Phillips / Weblogs, Inc.


Tesla gets loan approval from US Department of Energy

Electric vehicle manufacturer will use loans to build an assembly plant for Model S sedan and another facility to manufacture electric powertrains.

June 23, 2009

SAN CARLOS, Calif.--(BUSINESS WIRE) -Tesla Motors has received approval for about $465 million in low-interest loans from the US Department of Energy to accelerate the production of affordable, fuel-efficient electric vehicles.

Tesla will use $365 million for production engineering and assembly of the Model S, an all-electric family sedan that carries seven people and travels up to 300 miles per charge.

The Model S has an anticipated base price of $49,900 after a $7,500 US federal tax credit. It has lifetime ownership costs equivalent to a conventional car with a sticker price of $35,000, thanks to the lower cost of electricity vs. gasoline and a relative lack of service and maintenance. Tesla expects to start Model S production in late 2011 in a state-of-the-art assembly plant employing about 1,000 workers.

Tesla will use $100 million for a powertrain manufacturing plant. The facility will supply all-electric powertrain solutions to other automakers, greatly accelerating the availability of mass-market EVs. The new facility will employ about 650 people.

Tesla is in the final stages of negotiation for facilities in California.

The loans are part of the Advanced Technology Vehicle Manufacturing Program, which provides incentives to new and established automakers to build more fuel-efficient vehicles. Created in 2007 and appropriated in September 2008, the $25 billion ATVM aims to reduce America's dangerous dependence on foreign oil and create "green collar" jobs. The program is entirely unrelated to the stimulus package or the so-called "bailout" funds that General Motors and Chrysler have received.

"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. "We are honored that the US government selected Tesla to be among the first companies to participate in this progressive program."
Building on Proven Technology

The Model S sedan features exceptional performance, styling and utility, with unrivaled cargo and passenger space. Its floor-mounted powertrain is the culmination of a half-decade of engineering in the heart of California's Silicon Valley, where Tesla developed the Roadster.

The highly acclaimed Roadster is the first production battery electric vehicle to travel more than 200 miles per charge and the first US- and EU-certified Lithium-Ion battery electric vehicle. With an estimated range of 244 miles per charge and zero tailpipe emissions, it's the first production vehicle to offer supercar performance with a clean conscience.

Tesla has never applied for federal funds for the Roadster, an American sports car that consumes no gasoline whatsoever. Tesla expects the Roadster business unit to be profitable in the third quarter. Privately held Tesla will finance sales and marketing for the Model S through private capital.

Tesla has delivered more than 500 Roadsters to customers. Later this month, Tesla will begin delivering its second-generation Roadster and Roadster Sport, an even higher-performance vehicle.

Teslas do not require routine oil changes or exhaust system work. They have far fewer moving (and breakable) parts than internal combustion engine vehicles. They qualify for federal and state tax credits, rebates, sales tax exemptions, free parking, commuter-lane passes and other perks. The Model S costs roughly $5 to drive 230 miles – a bargain even if gasoline were less than $1 per gallon.

The Model S, which carries its charger onboard, can be recharged from any conventional outlet. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge. Tesla is taking reservations online and at its two showrooms in California.

Tesla will expand its network of showrooms this summer with stores in New York, Chicago, Seattle and Miami. Tesla will open its London showroom June 25, followed by Munich and Monaco. Additional stores will be opened in Washington DC and Toronto.

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    • 1 Second Ago
      • 6 Years Ago
      Tesla's making some interesting battery claims yet they haven't done a fraction of the testing that the Volt has already undergone.

      The Roadster is essentially a hand-built vehicle using a labor-intensive kludge of a battery pack, because that's what there was at the time.

      Those production techniques do not scale to a mass-market vehicle sold by the tens of thousands.

      With no ability to actually build the Model S, I agree with others that Musk probably commissioned the Model S ultimately to sell the brand.
        • 6 Years Ago
        Wrong. Tesla Motors started battery testing back in 2003, continuing up until production started in 2008. GM didn't start battery testing until they started the Volt program in 2006. Granted, GM had a lot more resources than Tesla did, but Tesla has been at it much longer.

        The battery cells Tesla Motors chose had the highest energy density and the lowest cost per Kwh stored when they started development, and that is still true today. But battery development is ongoing, and Tesla Motors is willing to switch battery type and/or cell size if something better comes along.

        This loan grant is to build production facilities for the Model S, Tesla has a fully functional prototype so most of the development is already done. If Elon simply wanted to sell out, he would have done so after launching Roadster production, and wouldn't have bothered with the Model S.
      • 6 Years Ago
      My favorite solution for longer range travel would be an expanded and improved Autotrain service. Just load your electric car on the train, sit back and relax, have a nice meal in the dining car, do a little internet or a movie, and arrive at your destination with your car, all charged up and ready to go.

      Maybe, just maybe, it could even be a high speed train, running up around 200 mph, so it's much quicker that driving yourself. While were at it, let's make it an electric train, running on juice from renewable sources.

      Oh well, I know it's just a dream, and not at all likely to happen in the US of A in my lifetime.
      • 6 Years Ago
      This news made my day. I'm looking forward to driving the Model S : )
      • 6 Years Ago
      Range extenders certainly have their place. Range anxiety will prevent lots of people from buying a pure electric, so an RE is ok as crutches go. I expect that will change as folks get more comfortable with electrics, more charging stations get setup, and batteries keep getting better and better.

      The downside with range extenders is that you still have fuel tanks, fuel pumps, gas gauges, fuel injectors, starters, alternators, belts, timing belts, air filters, camshafts, pistons, rings, valves, oil pumps, oil changes, spark plugs, fuel recovery systems, vacuum sensors, oxygen sensors, thermostats, PVC valves, exhaust headers, exhaust pipes, mufflers, etc.

      All that stuff goes away with a pure electric. With the many cars I've owned over the years, just about every single one of those parts has broken or failed at some point or another.
        • 6 Years Ago
        A rentable range extending trailer with extra storage space solves many percieved problems with EV's

        A 10kW range extender could be the size of a small suitcase and easily removable from the car for upgrades and repairs etc.
        • 6 Years Ago

        I think you are under sizing the range extender by quite a bit. Both in KWs and physical size. See the Tzero trailer. About 20KW and a lot bigger than a suitcase. I think that is your minimum size. The Volt range extender is 50KW IIRC and there will still probably be some complaints.

        A trailer was the first thought I had when considering the EV range issue, but then I made the next leap, why not just rent a car when I need long range.

        100 mile range cover 96% percent of my usage. I can rent for the rest.
        • 6 Years Ago
        Hi 3PeaceSweet,

        Here's a picture of a 25KW towable generator.. looks kind of clunky for a trip to the in-laws house.


        BTW like the moniker.
        Do you have kids named Armchair and Sofa .... with a dog called Pouffe :)
        • 6 Years Ago
        "The downside with range extenders is that you still have fuel tanks, (...), etc."

        Think of all the things that have ever set off your (or your friends') Check Engine light. For me the big ones are O2 sensors and exhaust gas recirculation valves.

        Which of those things would there be on an EV? Which of those things would still be around on a series hybrid?

        Mmmmmm, simplicity.
      • 6 Years Ago
      oh Tesla S...why are you so far away?? Sexiest car in the works IMO. I can't wait.
        • 6 Years Ago
        The Tesla Roadster is the sexist car ever IMO.
        But I like both the Roadster and Model S. Both are really inspiring vehicles.
      • 6 Years Ago
      The title of this post is "Tesla gets $465 in loans from the DOE to build Model S, EV powertrains." I assume the word "million" is missing.
        • 6 Years Ago
        whoops. headline corrected. thanks
      • 6 Years Ago
      Snowdog. Yeah there probably is some optimism in the 10kW part, though some serious development could make such small packaging possible and would be very neat to be able to drive everywhere with your own car. Surely with the current state of things, it is much more viable to have rental companies to keep on renting cars instead of powertrains, but we can always look ahead. If gasoline/diesel solid oxide fuel cells get to the market, it will allow much smaller packaging + smaller fuel tank (counting in fuel cell efficiency compared to internal combustion).
      • 6 Years Ago
      • 6 Years Ago
      "loan interest loans"

      Did you mean "low interest loans"?
      • 6 Years Ago
      Range extenders should be trailers that you rent when you need it.
      • 6 Years Ago
      Atmosphere at Tesla atm: Chardonnay and cheers to Nikolai ;-)!

      Now hopefully they can speed up a bit and have the Model S on the road sooner than planned and those dealerships here in Europe (Munich, Londen, Monaco :D).

      3PeaceSweet, that sounds like a great suggestion! Forget trailers (maybe for really long distance + space hauling), where currently the spare wheel is placed in the trunk, there would be sufficient room for the motor + diesel fuel). With pre-made holes for the exhaust and cooling intake and a standard location for those and the power connection. On other words, it would need a standard. The Model S is already a marvel in terms of space, can only get better.
      • 6 Years Ago
      This is by far the best EV news this summer. We're getting closer to being able to purchase a Model S. I was waiting to send in my deposit. I think many orders are going to get in now that we all know that they will have the money to actually build this thing.

      The hell with range extenders!

      Go Tesla!
        • 6 Years Ago
        Tesla S should really consider compatible swappable battery with Better Place, since they are already planning swappable batteries from the bottom of the car. This will allow people who wants range, Tesla styling, and be able to afford a Tesla. It would also allow Tesla to do the weekend 300 miles battery swapping for those who bought Tesla batteries quickly and easily. It will also allows Tesla to promote very easy minimal cost (to Tesla) battery "upgrade" for those who have cash later, or when better battery technology arrives.
        • 6 Years Ago
        I gotta side with Matt. Range extenders remove range anxiety. Range anxiety is a major, and often legitimate, reason to not purchase a pure EV.

        Until the correct infrastructure is in place, I wouldn't consider an EV without a range extender. Not as my primary vehicle anyway.
        • 6 Years Ago

        Points for being a Rush Fan. Obviously I like the older stuff.

        For myself I know that I don't even get close to 100 miles in a day except when I do a road trip vacation Twice/year. Clearly I could rent for that. Also the Model S has a smallest battery size with a ~160 mile range. As I said if you are exceeding that regularly, a Prius is probably better than a Volt. My basic point is while the short range EV with range extender initially makes sense, when you think about it more, it is kind of weak at everything, depending on your usage, one of the other solutions would likely work better.

        I agree, some will have range anxiety and will want something that covers every need, but pure EVs should fit perfectly in two car families as a commuter. It will also fit those willing to make a small adjustment to renting when they need "more car".

        I rented a moving truck to move last year. I certainly wouldn't want to drive something like that around on a regular basis.

        Heck I know people who gave up on car ownership. I know someone who rents about every second weekend. There are things like zipcar. I think when fuel goes back up (and it will). People will become more open to all kinds of alternate solutions and that includes pure EVs.

        I am not trying to hate on EREVs, I just don't know what it really covers better than the other solutions.
        • 6 Years Ago
        So why are range extenders bad?
        • 6 Years Ago
        What's wrong with range extenders? Well, here's Tesla's perspective:


        We looked closely at a range extender architecture for Model S. It ends up costing about the same in vehicle unit cost, a lot more in R&D and a lot more in servicing. Also, although performance is ok when both battery and engine are active at the same time, it turns really bad when the battery runs out and an undersized engine is carrying all the deadweight of the pack. Essentially, a REV is neither fish nor fowl and ends up being worse (in our opinion) than either a gasoline or pure electric vehicle.

        An important consideration that people without a technical background don’t understand is that you can either have a high power or a high energy cell chemistry, but not both. Since the battery pack in a plug in hybrid like the Volt has to generate the same *power* as a much larger battery pack in a pure electric vehicle, it has to use a low energy cell chemistry.

        That means a 40 mile REV pack is not 1/5 the size of a 200 mile pure EV pack, as simple proportionality would suggest. Another factor is that the REV pack is forced to do three to four times more cycles that a pure EV pack and is (obviously) hit with five times the current per cell during acceleration and regen braking, which forces the REV pack to be derated considerably.

        The net result is that a 40 mile REV pack is roughly half the size of a 200 mile EV pack. On top of that, you have to add the engine, generator and all the interconnects between engine and battery. It ends up having about the same mass and worse packing efficiency than a pure EV, plus you still have to deal with all the environmental issues of a gasoline engine.
        • 6 Years Ago
        How much would an average person save in fuel costs given a Model S vs a similar-sized ICE sedan? Disregarding the initial purchase cost, and assuming $3.50 - 4.00/gallon gasoline, I might save around $900/year going all electric. That's about 12-13 days of full-size vehicle rental where I am.

        I know there are lots of variable factors (price of electricity, gas, rental cost, miles driven, etc), but I can understand from a strictly economical perspective, why it still makes sense to own a larger vehicle and have it available year-round.

        For those who already own 2 vehicles, changing one to electric is probably the smart thing to do. But for the rest of us, I'm not so sure yet. I'm just playing devil's advocate here...I'm a big fan of electric
        • 6 Years Ago
        A range extender is just dead weight and needless maintenance, the vast majority of the time if you have decent battery range, if you don't have the battery range then battery becomes the dead weight in EV mode.

        You get a heck of a lot of simplification by ditching the Gas engine, cool system, fuel system, exhaust system.

        In choosing between:

        1) An efficient non plug in:

        2) A PHEV/EREV
        Volt (40 mile EV + RE)

        3) Pure electric:
        Model S (100 mile+ range).

        I think for most people you are better off with 1 or 3 most of the time.

        If you will almost never driver farther than your EV range of the Volt, a pure EV would be better (rent when you rarely need long range).

        If you will exceed your EV range very often, you will probably be better off just having another efficient non plug in solution, because EREV is going to be sub optimal once you flatten the battery.

        There may be some people that the EREV makes more sense for, but I think the majority would be better served by other solutions.
        • 6 Years Ago
        ...Because I won't need to settle for a Fisker Karma or a GM Volt (both have ICE-based range extenders). Yes, I know that a fully loaded 300-miles capable Model S could get quite expensive, but at least the possibility will exist.

        Pure electric with style, now that's the dream...

        • 6 Years Ago

        I think that most people who buy a big pickup truck use the *justification* "Maybe someday I'll need to move a fridge" to cover for the real reason: I want to feel like a real man.
        • 6 Years Ago
        >"rent when you rarely need long range"

        I think this is THE biggest obstacle to EV adoption. I think many people who don't really need SUV's and pickups justify them because on occasion they may need to carry extra people or pick up a fridge or pallet of grass or the like. So they buy/bought a much bigger vehicle than required to accommodate those possible eventualities. Of course they could have bought something smaller and rented a big vehicle a time or two a year if needed. But that mindset of upsizing to cover as many eventualities as possible is pretty pervasive, even with the sacrifices involved in using a big vehicle as a daily driver.

        Similarly, I bet the majority of drivers don't drive over 100 miles in a day very often. But most of those drivers wouldn't consider buying a vehicle with "only" a 100 mile range. The reasoning is the same as above... why not go ahead an buy the car that provides all-day driving capability even if I rarely/ever do that. That's an especially hard sell if the lower-range vehicle has a higher purchase price, because lifetime cost is another thing most consumers have a hard time grasping.

        It's definitely going to be a hard sell for EV's until gas gets and stays expensive.

        "Wheels can take you around
        Wheels can cut you down
        We can go from boom to bust
        From dreams to a bowl of dust
        We can fall from rockets' red glare
        Down to "Brother can you spare..."
        Another war
        Another wasteland
        And another lost generation"
        • 6 Years Ago
        I see the point about the EREV not often being the best solution, but here's a possible scenario where it would fit:

        Say your daily commute (work, groceries, stuff for kids, etc) is less than 40 miles, and your parents or girlfriend or whomever you often visit on weekends lives 220 miles away. A 200-mile electric range provides no additional benefit than a 40-mile electric range during the week, and no additional benefit for visiting your loved ones (which in this scenario you often do). But the range extender does keep you from having to rent something or own a second car for those weekend trips.

        Sound right?

        Obviously if your loved ones and regular vacation spots all are within 200 miles (or 160) then 1) you're lucky & 2) the EV is the better solution.
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