When reading the newsletter that electric car startup Tesla Motors sent to customers this morning, you could hardly be blamed for thinking the company had a Department of Energy loan in the bag. “Regarding funding,” writes CEO Elon Musk, “I am excited to report that the Department of Energy informed Tesla last week that they expect to disburse funds from our $350M Model S loan application within four to five months.”
But in fact Tesla has not yet been awarded any funds, and its application remains in the “financial viability and technical merit stage” of evaluation, which involves opening up the company books to the government, according to spokesperson Rachel Konrad. At this point, Konrad said, the DOE will find one cash-flow positive unit (powertrains). And while the company as a whole will not turn a profit in 2009, the Roadster unit is on track to become cash-flow positive this summer.
Still, the 4-5 month timeline comes as welcome news for Tesla — and the dozens of other companies vying for funds under the $25 billion DOE loan program for advanced vehicle manufacturing. It’s not the four weeks Energy Secretary Steven Chu was hoping for, but it’s an improvement over what Konrad said was starting to look like a year-and-a-half time frame just a few weeks ago.
Tesla’s V-P of corporate development, Diarmud O’Connell, revealed in an interview last fall that the company had applied for $400 million in low-interest loans, with slightly more than $200 million requested for building the Model S factory, and slightly less for battery development. Konrad said today that Tesla has requested roughly $100 million for the battery. The DOE is still in the early stages of evaluating that application.
Other tidbits from Musk this morning: The company has nailed down a date — March 26 — to show the Model S prototype in Southern California. It also plans to open showroom/service centers in Chicago, Manhattan, Miami, Seattle, London and Munich by year’s end. Finally, for everyone who’s been wondering about the lifespan of the Roadster battery pack, Musk said it “should last approximately seven years or over 100,000 miles under normal use.”