15 July 2009

Foreign investment in electric car

Electric cars are gaining juice. That is in part because an Abu Dhabi investment concern just purchased a part of the 10% stake Germany’s Daimler AG bought of Tesla Motors in May.

The new investment comes on the heels of a $465 million loan Tesla received from the U.S. Department of Energy (DOE) in June.

So far, the only vehicle Tesla has on the road is a $109,000 sports car.

Aabar Investments acquired part of the 10% stake in Tesla Daimler paid $50 million for in May.

Tesla designed its Roadster from the Lotus Elise sports car; the vehicle's 248-horsepower motor can get to 60 mph in under four seconds.
 
While initially a vehicle designed for the high end, the government and Tesla’s investors believe the carmaker can be more than just a fringe player.

“Tesla didn’t start with the Roadster because the founding team thought that the world needed another sports car,” said Tesla’s Rachel Konrad. “Rather, they knew that aiming at the high end of the market would allow them to turn a profit ... then cascade it down to more affordable cars.”

In March, the San Carlos, Calif.-based carmaker inched closer to that goal when it unveiled the Model S electric sedan. Tesla expects to price the vehicle at $49,900 after a $7,500 federal electric car rebate. The car should go on sale in late 2011 and travel as far as 300 miles on a charge. Tesla said it has already received more than 1,000 reservations for the vehicle.

Tesla’s ultimate goal is to produce about 20,000 Model S vehicles per year, Konrad said. DOE loans are crucial to that plan. Tesla has said it will use $365 million of the DOE money for production engineering and the assembly of the Model S. It will use $100 million for a California power train manufacturing plant expected to employ 650 workers.

For related information, go to www.isa.org/productivity.