Govt Picks a Winner: Tesla Gets $465 Million
Washington, DC – Today, the Obama Administration announced $8 billion in conditional loan commitments for the development of innovative, advanced vehicle technologies that will create thousands of green jobs while helping reduce the nation’s dangerous dependence on foreign oil.
The loan commitments announced today by the President include $465 million to Tesla Motors to manufacture electric drive trains and electric vehicles in California.
These are the first conditional loan commitments reached as part of the Department of Energy’s Advanced Technology Vehicles Manufacturing program. The Department plans to make additional loans under this program over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.
“We have an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America,” said President Obama. “These loans – and the additional support we will provide through the Section 136 program – will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market.”
“By supporting key technologies and sound business plans, we can jumpstart the production of fuel efficient vehicles in America,” Energy Secretary Steven Chu said. “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.”
These commitments will help reduce the 140 billion gallons of gasoline Americans consume each year, lessening the nation’s dependence on the volatile world market for oil, and decreasing the cause of a fifth of the nation’s carbon emissions. The Obama Administration recently announced an agreement to raise passenger car fuel standards from 27.5 miles per gallon to a target of 35 miles per gallon (mpg) by 2016. While 35 mpg is ambitious, the Department of Energy’s auto loan program received more than a hundred applications for loans to help achieve greater fuel efficiency. The competition among advances in conventional engine technologies, next-generation biofuels, and transportation electrification holds the potential to increase US fuel efficiency dramatically over the next several years.
The Advanced Technology Vehicles Manufacturing Loan Program is an open and competitive process focusing on the best companies and best technologies in American manufacturing. First appropriated in the fall of 2008, the program will provide about $25 billion in loans to companies making cars and components in US factories that increase fuel economy at least 25 percent above 2005 fuel economy levels. The intense technical and financial review process is focused not on choosing a single technology over others, but is aimed at promoting multiple approaches for achieving a fuel efficient economy.
Applications for the loan program have included vehicles running on electricity, biofuels, and advanced combustion engines, and were submitted by both car and component makers, US automakers, US manufacturing subsidiaries of non-US-based companies, major US auto parts suppliers, and innovative startups.
Two Teslas caught in the wild by Steve Jurvetson via creative commons license at flikr
Source: US Energy Department
Class: PRESS RELEASE
Tesla MODEL S with 300 miles range RULES !
An interesting look at this is on http://www.triplepundit.com
Chalk one up for sanity!
“The all-electric sedan consumes no gasoline and runs entirely on electricity from any conventional 120V or 220V outlet. It will get the equivalent of more than 250 miles per gallon, far exceeding the 32.7 mpg minimum efficiency required for large sedans.”
What can I ask more than that ! 250 miles per gallon !
ELECTRIC RULES NOW !
[...] Govt Picks a Winner: Tesla Gets $465 Million June 24th, 2009 Goto comments Leave a comment Hello there! If you are new here, you might want to subscribe to the RSS feed for updates on this topic. Steven Chu this morning finally puts the nail in the coffin of the congressional No We Can’t contingent’s stance. For the last 8 years they’ve been saying that “government can’t pick winners and losers”, by which they simply meant keep all the current lavish oil subsidies in place and don’t make any changes in energy policy that might develop a competitor. Read more of this story » [...]
How is this even slightly intelligent. Who on earth is going to be able to afford one? They’re getting all this money, but they sell luxury electric cars that cost hundreds of thousands of dollars. Fun as it may seem, it’s not practical and isn’t going to positively impact the average American’s life at all, it’s only going to raise their taxes so the rich can buy these luxury vehicles. C’mon… think it through. It’s ridiculous. The Hybrid Hummer would have been a better investment than a two passenger luxury car maker. Americans have families and budgets and have to go shopping for groceries. This makes no sense at all.
This sounds good, but I find myself wondering if Obama and congress have yet determined that a “sound business practices DO NOT include government subsidies and DO require a profit.
THIS SURE LOOKS LIKE A GOVERNMENT SUBSIDY TO ME.
“These loans – and the additional support we will provide through the Section 136 program – will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market.”
It costs more to make the first of any entirely new invention Mort.
This will help it become more affordable faster.
Anyone who thinks Japan is a good model to follow needs to read this:
http://reason.com/blog/show/134295.html
I’m with Shorty Mort. As much as I love cars and especially the concept of electric cars, Tesla has not shown me that they deserve taxpayer support. Many reports have come out about internal strife at Tesla and severe cost overruns. Tesla is still a struggling start-up and it’s hard for me to understand why they deserve this money unless the decision is based largely on a company’s ability to generate PR and buzz for electric cars. I imagine there are many, many other electric car experimenters/developers who would have loved to had access to this money.
ON THE OTHER HAND — we’re throwing billions at banks, airlines, farmers and car companies, $465 million now sounds like pennies!
But seriously, as Mort wrote, giving millions of precious taxpayer dollars to Tesla to produce $50,000 luxury cars just doesn’t make sense to me.
Michael