Tesla Motors, the niche automaker with its $109,000 electric sports car, would seem an unlikely candidate for receiving funding from diverse sources like the US government and a fund in Abu Dhabi, yet that is what the California-based company has managed thanks to its electric drive technology.
In June, the US government Department of Energy said it would lend $465 million to Tesla to help it develop green car technology. On Monday, Aabar Investments, Abu Dhabi acquired part of a 10 per cent stake in the company that Daimler AG of Germany had acquired in May.
Tesla's Roadster is not a people's car by any means. It is modeled on he lines of the Lotus Elise sports car and boasts a 248-horse power motor that can accelerate it to 60 mph in under four seconds.
But, if the government and Tesla's investors are to be believed, the carmaker is set to emerge as something much more than a fringe player. The Roadster, of which it has sold more that about 500, is only the beginning, according to the company.
According to Tesla, the founding team did not start with a sports car because they thought the there was an urgent need for one, rather they aimed at the high end of the market to allow them a profit which could be ploughed down to develop more affordable models. The same strategy had been successfully implemented by mobile phone manufacturers.
The company's goal is to roll out 20,000 Model S vehicles a year and the Department of Energy loans are crucial to the plan. The carmaker plans to use $100 million for a California power train manufacturing plant that will employ 650 workers and the $365 million of the DOE funds for production engineering and the assembly of the Model S.