Avoiding Insolvency, Tesla Motors Borrows $40 Million

America’s all-electric car maker – Tesla Motors – has been wowing fans ever since its small two seat sports car finally rolled off a British assembly line earlier this summer. Lots of delays pushed back the car’s release, resulting in Tesla bleeding through more cash than it had expected to before production got going.

As a result of the delays, Tesla’s financial picture suddenly became very bleak as cash reserves dwindled to below ten million dollars, a small amount of money on hand even for a tiny automaker. Talk that the company would seek bankruptcy protection began to surface, but those fears have now been allayed thanks to new funding that has become available.

Prior to its most recent announcement, Tesla Motors had received cash injections of $145 million from private investors including tens of millions of dollars contributed by Elon Musk who is the company’s chairman and chief executive officer. Indeed, it was Musk and a team of private investors who coughed up the most recent forty million dollars which should be enough money to keep the car company going for the long run.

So far, just fifty Tesla Roadsters have been produced, an all-electric sports car with a phenomenal zero to sixty speed of just 3.5 seconds. Priced at $109,000, the Roadster has some 1200 buyers on its waiting list, people who have put down deposits for the rare sports car.

Tesla says that the new funding will be used to speed up Roadster production while freeing up funding for a second vehicle, the S Model. The “S” is a four door sedan that the company plans to build at a new factory being assembled near San Jose, California. That car was to make its debut near the end of 2010, but production isn’t likely to begin much before summer 2011.

The Tesla Roadster is the first of what will likely become several electric cars produced by a variety of manufacturers worldwide. Fisker Automotive has a sedan in progress, while General Motors will be producing the Chevrolet Volt, a small sedan that should be ready late 2010. Toyota, Nissan, and Chrysler each have several models in the planning and/or production pipeline, while other manufacturers including BMW are currently testing pre-production models of their own.

Tesla Motors Sedan is California Bound

Tesla Decides To Stay In California

The state of California received some very good news lately when electric car manufacturer, Tesla Motors, purchased an 89 acre spread near San Jose. The property will be used to build the company’s
new manufacturing facility for its upcoming S Model sedan.

Along with the factory, Tesla Motors will also build its brand new company headquarters, ensuring that the automaker stays close to its California roots. Tesla was founded in San Jose back in 2003, but had considered moving to New Mexico when that state offered an attractive incentive package. The new facility will be located just twenty miles away from its current headquarters.

1000 New Jobs To Be Created

For California, the state will have to offer a rent abatement for ten years and they’ve promised to waive the sales tax on the car when it goes into production, at least for California buyers. In exchange, Tesla Motors will create as many as 1000 new jobs for the manufacturing facility and corporate headquarters combined, clearly something that will help the tech industry in the Silicon Valley.

Earlier in 2008, Tesla finally got its luscious Roadster into production, a car that is built on a Lotus assembly line in the United Kingdom. That car quietly rockets occupants from zero to sixty in just 3.9 seconds while providing a handsome 245 mile range for each charge. Powered by a state of the art lithium-ion battery, the $98,000 Roadster is a real head turner, just the kind of car that brings much enthusiasm to the green market.

The $60K Tesla S Model

As far as the S Model goes, Tesla Motors isn’t saying a whole lot about the car just yet. We do know that they want to build as many as 15,000 units annually and sell each car for about $60,000. Tesla has its eye on premium manufacturers including BMW, Mercedes, and Audi to position the S Model, which is expected to seat five adults. A similar mile range is expected with the S Model which is expected to go into production in late 2010.

With the S Model, don’t expect Tesla to do the expected. Talk of including a small gas engine to extend its range, ala the Chevrolet Volt, has been aired something that could expand the car’s appeal to include people who want to take their sedan on long trips. As it stands right now, the Roadster must be recharged when it runs out of juice, an overnight task that currently limits the sportscar’s range.

First Tesla, Then Fisker And ZAP

Tesla Motors isn’t the only electric car manufacturer in the news lately. Fisker Automotive and ZAP Electric Cars are also making plans to roll out their first models within the next year or two.

Copyright 2008-2012 — Matthew C. Keegan is the owner of a successful writing and marketing business based in North Carolina, USA. He manages several websites and is a contributing writer for Andy’s Auto Sport, a retailer of quality tail lights and ground effects.