Tesla snags federal funds

Tesla's Model S sedan was unveiled in March 2009.

After a long wait, electric car manufacturer Tesla Motors announced it has been approved for about $465 million in loans from the U.S. Department of Energy.

The funds are the first to be awarded through the federal government’s Advanced Technology Vehicle Manufacturing Program, a $25 billion program aimed at automakers developing fuel-efficient vehicles. Ford (NYSE: F) and Nissan (Nasdaq: NSANY) were also awarded loans.

San Carlos-based Tesla says it plans to use $365 million of the loan for production of its electric Model S sedan. Tesla launched the vehicle in March 2009, and in May said it had received more than 1,000 reservations for the car. The sedan is expected to go into production in late 2011 and to have a base price of about $57,000—which is significantly more affordable than the Tesla Roadster.

About $100 million will go toward a powertrain manufacturing plant, which will supply electric powertrains to other automakers, thereby boosting the market availability of electric vehicles, Tesla says. The company says it’s in the final stages of negotiation for facilities for the plants, which are expected to employ about 1,650 people.

Tesla had originally planned to begin Model S production in 2010 in a San Jose, Calif., plant, but delayed plans citing “extraordinary economic times.” While vice president of business development Diarmuid O’Connell told Sustainable Industries earlier this year that Model S production was not contingent upon federal loans, he added that the company was hoping for speedy approval by the energy department [see “Will cleantech save them,” Sustainable Industries, March 2009].

Meanwhile, the company has so far delivered about 500 of its Roadster electric sports cars to customers, and expects Roadster business unit to reach profitability in mid-2009.