Tesla is worried they won't have enough money to build their sedan if they don't get the low cost loan they hoped for from the federal government.
Tesla had applied for $400 million of the $25 billion dollar loan program set up by the government to build high fuel efficient vehicles. But now that money may be used in the 'bailout' of the Big 3 (GM and Chrysler, more than Ford if reports are to be believed.
But some are criticizing the use of the federal government money to build the new hybrid sedan from Tesla. The vehicle is expected to be priced at $57,499 and that makes it a luxury vehicle.
But, the Volt is going to cost close to $40,000, so I'm not sure what people are expecting out of these cars.
The money may be initially used to build expensive luxury cars, but the technology, battery production, and so on are just what's needed to advance the fuel economy goals set out by the government.
The loan money for Tesla will be used to open a $250 million manufacturing facility in San Jose, CA. They are also planning on using the money to expand its drivetrain business, which they sell to other automakers and for a battery-cell production factory.
"We can't move forward with that without a major amount of capital," Musk said. "If we don't get any government funding, then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now."
Source: Electric car maker seeks U.S. aid | The Detroit News | detnews.com