Tesla wants $400 million loan from US Govt.

Nov 21, 2008 Auto Tech

Tesla Motors has applied for about $400 million of a $25 billion government loan package designed to help automakers produce more efficient vehicles and meet new fuel economy standards.Tesla currently makes an electric sports car called Roadster, which has sold about 60 and an order book of about 1000.

Diarmuid O’Connell, Tesla’s VP of corporate development, revealed the amount in an interview with peHUB Wednesday, less than three weeks after CEO Elon Musk declared a $40 million round of convertible-debt financing “significantly more than we need.” According to O’Connell, Tesla would use the direct loans for two projects: a new battery manufacturing operation, and a delayed mass-market sedan, now called the Model S.

Powertrain maker AFS Trinity Power, another startup, announced plans this week to request that amount for converting a shuttered SUV plant into a plug-in hybrid factory, that uses capacitors along with conventional batteries.

Tesla is backed by billionaire Elon Musk who made his bucks by the sale of Paypal to Ebay. It has been consistently over budget and behind time in its ambitious plans till now.

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