Telsa Motors, Inc., has received the best news of its short history. The Department of Energy (DOE) has announced a $465 million loan with the California electric vehicle manufacturer for construction of a facilities in Northern and Southern California to respectively manufacture the car’s power train and the Model S electric sedan.
The Palo Alto facility will assemble electric vehicle battery packs, electric motors, and related electric vehicle control equipment, both for Tesla’s own electric vehicles and for sale to other automobile manufacturers.
The agreement was negotiated and signed by the Department’s Loan Programs Office, which supports the development of innovative, advanced vehicle technologies to create thousands of clean energy jobs while helping reduce the nation’s dependence on foreign oil.
Tesla’s planned Model S will consume no gasoline and will not produce any tailpipe emissions. It is being designed to offer a variety of range options depending on the battery pack used, from 160 to 300 miles on a single charge.
Volume production of the Model S is planned to begin in 2012 with a target production capacity of 20,000 vehicles per year by the end of 2013.
According to Tesla, the Model S project and power-train manufacturing facility are expected to create over 1,600 jobs.
The announcement marks the second loan arrangement agreement signed by DOE with an advanced technology vehicle manufacturer. In September 2009, DOE signed its first loan agreement for $5.9 billion to Ford Motor Company. The Department has also signed conditional commitments with Nissan North America, Inc. and Fisker Automotive.
Tenneco Inc. became the first advanced technology component manufacturer to obtain a conditional commitment from DOE in October of last year. Nissan plans to build electric cars and battery packs at the company’s Smyrna, Tennessee manufacturing complex, while Fisker recently announced plans to build plug-in hybrid electric vehicles by reopening a shuttered GM plant in Wilmington, Delaware.
The Department of Energy was appropriated $7.5 billion by Congress to support up to $25 billion in loans to companies making cars and components in U.S. factories that increase fuel economy at least 25 percent above 2005 fuel economy levels.
The Department plans to make additional loans over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.