Tesla Motors presented its second EV model designed and ready for mass production, on 26 March. After proving technological know-how with its Roadster sports car, Tesla is now offering an EV model more accessible to the general public as it touts a $49,000 (€36,500) price tag for this family car

EV fans and media gathered yesterday to discover Tesla’s new low-carbon EV at the SpaceX rocket plant near San Francisco. The first models should be produced in the third quarter of 2011. The exact location of the production is still unknown but the company confirmed that the car would be built in Southern California.

$350 million loan from U.S. Department of Energy

Tesla is awaiting the approval of a $35 million loan from the US Department of Energy (DoE) to build the Model S factory in South California. Under the 2009 Recovery Act, this loan is part of the $2.4 billion funds allocated to bring high-efficiency PHEVs and EVs to the market.

Tesla's CEO Elon Musk expects to get confirmation about the loan before the end of this year but is very confident that the company will succeed in having the capacity to mass market its model for the planned date. "This car will be manufactured. It will come to market. They should have zero doubt about that," Musk argued when proudly unveiling the four-door sedan with its roomy interior.

Three power configurations

The standard Model S will come with the 160-mile battery pack and will cost a mere $49,900 with the federal tax cut of $7,500 for tax payers already deducted. This tax cut is also part of the 2009 Recovery Act and ranges from $2,500 to $7,500. The batteries will have an expected life expectancy of 6 to 9 years and will easily be replaced. People who plan to go for a longer than average journey will have the possibility to rent bigger capacity batteries.

Although the new model was developed around the same battery technology, it will cater for a very different audience than its first $109,000 Roadster model as the latter was designed for car enthusiasts and Tesla plans to sell about 1,000 cars a year compared with 20,000 for the Model S.

Background

This week, President Obama announced that $1.5 billion would go to US high-efficiency battery and components manufacturers whilst $500 million would go to PHEV electric motors producers. The final $400 million will be used to develop the relevant infrastructure and to offer professional training to technicians so as to repair PHEVs and EVs.

On 27 January 2009, the Senate Finance Committee agreed to a financial incentive to encourage wider use and production of alternative energy across the US. Up to 500,000 plug-in electric vehicles will benefit from the tax credit as of 31 December 2009.

Vehicles will be allocated credits depending on their weight. -

• Under 10,000 pounds: maximum $7,500 
• Under 14,000 pounds: maximum $10,000 
• Under 26,000 pounds: maximum $12,500 
• Above 26,000 pounds: maximum $15,000