it lives..........

[RACER X]

and Big O is still doling out $ like candy

Originally Posted by Mercury News
Tesla locks up $465 million in federal loans, will build battery facility in Bay Area

By Patrick May

Mercury News
Posted: 06/23/2009 06:25:43 PM PDT
Updated: 06/25/2009 03:17:04 AM PDT


With Tuesday's announcement of a $465 million federal loan to jump-start production of fuel-efficient cars, San Carlos' Tesla Motors ensured its survival and helped raise the Bay Area's stature as a hotbed of green innovation.

"Tesla's success is our success," said Nanci Klein of San Jose's Office of Economic Development.

And Tesla's decision to spend some of that money to open a $100 million advanced battery and powertrain manufacturing facility in the Bay Area — whose location will probably be announced next month — will "allow our local companies to engage even more with Tesla as they ramp up. We're ecstatic."

Privately held Tesla, maker of the all-electric Roadster, has been working
More auto news with the Department of Energy for two years to lock up the funding.

While its share pales compared with the $5.9 billion going to Ford Motor and the $1.6 billion to Nissan North America, the money green-lights Tesla's plans for the battery facility as well as an assembly plant in Southern California where it will produce its next car, the Model S. This next-generation zero-emission sedan will go into production in late 2011.

During a conference call Tuesday, Chairman Elon Musk said the loan will help Tesla turn a profit by next month.

"We don't need to raise more money; we may choose to, but we're not out there beating the bushes to find other investors." And he predicted "the entire automotive market will eventually become
fully electric, mark my word. It's just a question of how long."

Asked why he was so sure, Musk offered Tesla's recent sales as proof. "We sold 1,000 cars in a month and a half without having the money secured from the DOE, in the worst economy since the Great Depression, and with no advertising. What more do you need?"

The recession and credit crunch had hampered Tesla's access to cash, and getting the loan was considered crucial to its survival, even after the company announced in May that German automaker Daimler had acquired an equity stake of nearly 10 percent in the electric-car concern.

"It was either live or die," said Jim Hossack, an analyst with the AutoPacific consultancy in Tustin who called Tuesday's announcement "a turning point for the industry, just as big or bigger than Tesla's deal with Daimler. That gave them credibility and technical resources, and this government support is vital to them as well."

In fact, Tesla's strategic partnership with Daimler was a key factor in the Energy Department's decision to lend it money. In a statement, Energy Secretary Steven Chu applauded Tesla's focus on accelerating "production of fuel-efficient vehicles in America. These investments will come back to our country many times over, by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions."

Once dubbed "the poster child of green mobility," Tesla has been a leader in the race to make the electric car a reality, creating the first such vehicle, the Roadster, to travel more than 200 miles between charges. Next up: the Model S, a sedan the company hopes will have mass-market appeal that will sell for about $45,000. That's about half the price of the high-performance Roadster.

Last year, Tesla announced it would build a 500-worker assembly plant in San Jose, but then said in January that it would instead find an existing building to retrofit and would be looking for a new location.

Musk said Tuesday the company would announce "probably next month" the Bay Area location of its new powertrain manufacturing plant, where 650 employees will produce battery packs, chargers, motors and power electronics modules — the "brains" of an electric vehicle — for both Tesla vehicles and those of other automakers.

Battery pack production will begin in 2011, reaching about 10,000 packs by 2012 and 30,000 in 2013, the company said.

And while it would have been nice to land the 1,000-worker assembly plant here as well, San Jose's Klein said, "The powertrain is the heart of this technology, and that's what's most important to have in Silicon Valley."

Automobile analyst Philip Gott with IHS Global Insight welcomed Tuesday's announcement, but he wondered whether a niche company like Tesla, despite its innovative prowess, was the best place to put government money. He spoke from China, where the government was now teaming up with industry to try to dominate electric-vehicle technology.

"This will be a very tough global race for technological superiority over the next decade," he said. "It's about time we got started. But with all due respect to Tesla, and I admire their entrepreneurial zeal and perseverance, my view is their business model works only in a very specialized premium market. And I wonder if our tax money would be better spent on a more mainstream player."

[pauldun170]

So the US is basically underwriting a startup?

Are they going to subsidize the cars to make them competitive in the market place or are we just dumping cash into a niche car maker that will see probably 500 units a years in sales...

[goof2]

It is a drop in the bucket compared to the $25+ billion set aside for loans to promote alternative fuel vehicles. Hell, at least this money is going to a company based in America, unlike the $1.6 billion that is being loaned to Nissan North America to build a factory. The flip side is Nissan will most likely pay back their loan. I suspect the loan to Tesla will need to be written off once they declare bankruptcy in 5-10 years.

To put it in perspective though, I doubt Toyota could have developed the Prius if not for a loan from the Japanese government that I believe was estimated at $9 billion.

[pauldun170]

It is a drop in the bucket compared to the $25+ billion set aside for loans to promote alternative fuel vehicles. Hell, at least this money is going to a company based in America, unlike the $1.6 billion that is being loaned to Nissan North America to build a factory. The flip side is Nissan will most likely pay back their loan. I suspect the loan to Tesla will need to be written off once they declare bankruptcy in 5-10 years.

To put it in perspective though, I doubt Toyota could have developed the Prius if not for a loan from the Japanese government that I believe was estimated at $9 billion.

good point on all counts

[Homeslice]

Have they even sold any of those $100K impractical cars yet? The only people who would buy them are rich sports car buffs who already have 2-3 other cars. I would rather see this money going directly to battery companies, not auto companies.

[goof2]

One side issue, what dipshit decides to build a battery factory in the SF bay area? With their stringent environmental regulations, high labor costs, high property costs, and (I'm guessing) high tax rates that would be the last place I would want any factory, much less a battery factory. I would be concerned about any company that makes this kind of business decision.

[Dave]

Have they even sold any of those $100K impractical cars yet? The only people who would buy them are rich sports car buffs who already have 2-3 other cars. I would rather see this money going directly to battery companies, not auto companies.

im sure ed begley jr got one :lol:

[RACER X]

Have they even sold any of those $100K impractical cars yet? The only people who would buy them are rich sports car buffs who already have 2-3 other cars. I would rather see this money going directly to battery companies, not auto companies.

azooom had 1 show up to a trackday in austin.

[goof2]

azooom had 1 show up to a trackday in austin.

How long did the battery last?

[Adeptus_Minor]

Have they even sold any of those $100K impractical cars yet? The only people who would buy them are rich sports car buffs who already have 2-3 other cars. I would rather see this money going directly to battery companies, not auto companies.

Amen.
They're cool as shit looking and it's nice to see a company realize the fact that not everyone who buys an alternative energy vehicle is going to be happy with a boring driving experience. But seriously... that price tag.
One would hope that their investment in battery manufacturing precipitates a drop in the cost of their vehicles.

[goof2]

Amen.
They're cool as shit looking and it's nice to see a company realize the fact that not everyone who buys an alternative energy vehicle is going to be happy with a boring driving experience. But seriously... that price tag.
One would hope that their investment in battery manufacturing precipitates a drop in the cost of their vehicles.

For a supposed supercar (125mph top speed hurts that argument more than a little) the price isn't really horrible. Mercedes has a few cars that aren't even AMGs with base prices higher than that.

For a car that generously claims a range of under 250 miles though, any price is kind of hard to justify. Driven at full pace by Clarkson on Top Gear their Tesla only managed 45 miles before it ran out of juice. That automatically relegates the Tesla from transportation to toy in the eyes of most.

[unknownroad]

One side issue, what dipshit decides to build a battery factory in the SF bay area? With their stringent environmental regulations, high labor costs, high property costs, and (I'm guessing) high tax rates that would be the last place I would want any factory, much less a battery factory. I would be concerned about any company that makes this kind of business decision.

That was my first thought as well. They could probably buy an operational facility in Detroit for less than the cost of the land they'd need to build their factory's parking lot in the Bay area.

A 250-mile range isn't a deal-killer for the ragtop, IMO. If you're dropping $90k on one, you've probably got other cars for long trips. 250 miles is more than enough to get you out to a fancy restaurant, pose downtown for a while, hit the clubs, and get back home to recharge. If you're a big-city hipster rather than a suburbanite, it'll probably get the job done for the whole weekend.

[goof2]

That was my first thought as well. They could probably buy an operational facility in Detroit for less than the cost of the land they'd need to build their factory's parking lot in the Bay area.

A 250-mile range isn't a deal-killer for the ragtop, IMO. If you're dropping $90k on one, you've probably got other cars for long trips. 250 miles is more than enough to get you out to a fancy restaurant, pose downtown for a while, hit the clubs, and get back home to recharge. If you're a big-city hipster rather than a suburbanite, it'll probably get the job done for the whole weekend.

And that shows the limited usefulness of the vehicle. How many people do you think have the money to spend $90k (actually just over $100k) for a second or third vehicle, even if it didn't have significant range restrictions?

I also consider the 250 mile range optimistic. Again, Top Gear tested one on their track and only managed to get the car 45 miles before it needed recharging. While they were using it at 10/10ths the whole time I wouldn't feel very confident the car would get anywhere near 250 miles when driven at 7/10ths.

This car would be ideal for a "big-city hipster" except most big city hipsters don't have a private garage. How are they going to charge the thing when they have to park on the street or in a large parking garage?

Most of the young "big-city hipsters" I have seen are also $40k per year millionaires living off credit and couldn't afford one $90k car, much less one as a second car.

[azoomm]

How long did the battery last?

It requires an outlet to recharge. So, when the battery was low - just plugged it in and good to go in about 15 minutes.

The real bummer was - about a week after it was at the track, it was destroyed on IH35 by having a semi destroy it in a major traffic incident. The driver OK - car destroyed.

[nhgunnut]

It requires an outlet to recharge. So, when the battery was low - just plugged it in and good to go in about 15 minutes.

The real bummer was - about a week after it was at the track, it was destroyed on IH35 by having a semi destroy it in a major traffic incident. The driver OK - car destroyed.

I would love to see a battery completely drained that you could recharge to full capacity in 15 minutes. If that were the case we would all be driving plug ins. On a different note this looks like one more times some campaign contributor bought influence (oh and apparently your tax dollars too)

[azoomm]

On a different note this looks like one more times some campaign contributor bought influence (oh and apparently your tax dollars too)

pppssshhhhhaaaaa... that wouldn't EVER happen.... :whistle:

[goof2]

I would love to see a battery completely drained that you could recharge to full capacity in 15 minutes. If that were the case we would all be driving plug ins.

Tesla quotes 3 1/2 hours to go from fully discharged to fully charged, but that is only if you have had their high power recharge kit (240 volt, 70 amp) installed in your home. After 100 miles it still takes 2 hours. They don't quote a time for using a standard outlet as they say people will charge when they sleep and it will be recharged when they wake up so it doesn't matter.

They also don't say who is willing to have you hook up to their outlet to charge it, which is a factor when the car needs electricity about equal to what the average house uses in 2 full days.

[askmrjesus]

It should be pointed out, that the innovation that drove the technology now found in consumer based transportation, often came from ridiculously expensive vehicles.

Think MotoGP, F-1, and for that matter, NASA.

JC

[goof2]

It should be pointed out, that the innovation that drove the technology now found in consumer based transportation, often came from ridiculously expensive vehicles.

Think MotoGP, F-1, and for that matter, NASA.

JC

The difference is taxpayers are not required to fund MotoGP and F-1. I'm OK with NASA but I don't think we need another one to fund what what amounts to a rich person's toy.

[askmrjesus]

The difference is taxpayers are not required to fund MotoGP and F-1. I'm OK with NASA but I don't think we need another one to fund what what amounts to a rich person's toy.

I guess it all depends on whether or not it's successful in creating jobs and new technology.

I would be the first to admit, however, that this project would not have been my first choice.

JC

[Adeptus_Minor]

The difference is taxpayers are not required to fund MotoGP and F-1. I'm OK with NASA but I don't think we need another one to fund what what amounts to a rich person's toy.

We already do...

http://www.knowledgerush.com/wiki_image/9/9d/AirForceOne.jpg