While expectations were quite high on the scheduled release of the Tesla Model S by 2011, it looks like everything has been frozen at the moment. Lacking the necessary measures to raise $100 million in venture capital for the factory, they have now turned to government aid for help in pushing through with the concept vehicle.
“Instead, the company is hoping to get $400 million from the government as part of the Advanced Technology Vehicle Manufacturing Program,” the report said; of that, $250 million would go into the factory and $150 million into a separate powertrain facility.
The report speculates that the move may be a negotiating tactic on the part of Tesla to get the city of San Jose to come back with a sweeter offer. Tesla currently plans to have the Model S, a less expensive, four-door sedan intended to compliment the Tesla Roadster, on the road for 2011.
(Source) Silicon Valley Insider
Tags: city of san jose, technology vehicle, tesla roadster, venture capital
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It’s unfortunately that no one called me before posting this blog; I would have gladly given the blogger accurate information on which to base the post.
Tesla announced in September the intention to build an assembly plant in San Jose to manufacture our four-door, zero-emission, all-electric sedan, the Model S. The site was an 89-acre vacant lot in north San Jose on Zanker Road, known as a “greenfield” site because there has never been construction on it.
However, after much review and analysis, Tesla determined that building on Zanker Road would not have been the most cost-effective and expedient way to get the sedan to market. In addition, the US Department of Energy is awarding low-interest loans to automakers who develop “brownfield” sites (in other words, sites that used to be factories or plants but have been abandoned, mothballed or shut down).
Tesla is applying for a roughly $250 million federal low-interest loan to finance a 500,000-square-foot assembly plant to build the sedan. Tesla does not want to jeopardize our low-interest loan application, and we believe that building from scratch on a greenfield site would put us at a competitive disadvantage against other automakers and suppliers competing for the $25 billion in low-interest federal loans.
We are quite far in negotiations on another site. Tesla is still on track to begin production of the Model S in 2011. The headline is inaccurate and the Model S is not in any way “on hold.” In fact, we still plan to unveil the Model S to the media and public in March.
Rachel Konrad
Tesla Motors Inc.
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