Tesla delaying Model S Sedan due to the financial crisis

Article by Christian A., on August 29, 2010

The new electric car company Tesla Motors has experienced economic troubles lately, forcing the company to apply for an aid package of $400 from the Department of Energy.

The electric sports vehicle manufacturer has lately made known that without the aid there will be a delay in the introduction of its Model S sedan.

In interview with the Detroit Free Press, Elon Musk, Tesla CEO, said that an intended $250 million plant in San Jose, California, cannot be opened on schedule apart from the loans.

"We can't move forward with that without a major amount of capital," said Musk. "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."

The new factory will manufacture the Model S, a four-door sedan version that will cost $57,500 and developed to rival cars such as the Mercedes Benz E-Class diesel and the Lexus GS 450h.

With the loans, Musk said that Tesla would be able to sell up to 20,000 Model S sedans annually as soon as 2011. Tesla is hoping to receive a piece of the $25 billion federal reserved to motivate the design of energy-economical vehicles by American companies.

The Bush administration and lawmakers are presently discussing the best means of distributing the funds in question.

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