Tesla Motors to show off electric sedan next month
Electric car maker Tesla Motors expects to be profitable by mid-year as it plans to open more showrooms and demonstrate a prototype of the Model S electric sedan.
Updated at 11:45 am PT with more details on DOE loan application.
Electric luxury car company Tesla Motors is on target to be profitable and to demonstrate a "street-drivable" prototype of its next car next month: the Model S sedan.
CEO Elon Musk sent out a detailed update to subscribers of its monthly newsletter, boasting about a backlog of orders for its Tesla Roadster sports car and assuring company watchers that the company is on sound financial footing.
"We remain on track with our cost reductions and production ramp, so it appears highly likely that Tesla will meet the goal promised to those investors of becoming profitable by mid year," Musk wrote.
The company raised $40 million in December last year and at the same time admitted to being low on cash. It also had to scrap plans to raise money through an initial public offering on the stock market.
Musk said the company plans to show off a prototype of the Model S on March 26 at the California factory of SpaceX, Musk's space tourism venture.
The Model S is a four-door, all-electric luxury sedan that Tesla expects to start manufacturing in 2011. A ballpark price the company has stated is $60,000. The list price on the Roadster is $109,000.
In a significant financial development, Musk said that Tesla expects to receive $350 million in Department of Energy loans to build a factory for the Model S within four to five months.
Company representative Rachel Konrad said that Tesla's DOE loan application is in the "later stages" but the company has not yet gotten confirmation that it will receive the loan. "The DOE is evaluating Tesla's financial viability and technical merits. The DOE is doing its due diligence, and we are very optimistic about a relatively expedient timeline for disbursal of funds," Konrad said in a statement.
In an interview last Friday, Energy Secretary Steven Chu said he is trying to expedite the loan-granting process at the DOE in an effort to revive the economy.
Musk said that the Roadster is sold out for 2009, meaning that Tesla has received orders for all of the cars that it can produce. The Tesla Roadster Sport, which accelerates a tad faster than the Roadster, is set for delivery in late June.
It has reached agreements to open Tesla-owned stores in Chicago and London's Knightsbridge district and is plans to open outlets in Manhattan, Miami, Seattle and Munich.
Musk also detailed a battery-swapping program for current owners, where they can prepay to get a discount for replacement battery after seven years.
The life and durability of batteries is something of an unknown for electric vehicle manufacturers and customers, leading some automakers to consider battery-upgrade programs.
"One of the top questions customers ask about the Roadster is, 'How long will the battery last and what will it cost to replace?' Tesla engineers have determined that a Tesla battery pack should last approximately seven years or over 100,000 miles under normal use," Musk said.