Tesla Receives Funding Despite Troubles

As Tesla Motors' founders battle it out, the company is approved for a $465 million-loan from the U.S. Department of Energy.

By Jason Del Rey |  @DelRey   | 
 

A tumultuous year for Tesla Motors and its chairman and CEO Elon Musk, just took a turn for the better. Earlier this week after Musk posted a stinging rebuttal aimed at co-founder Martin Eberhard and his lawsuit filed against Tesla and Musk, the U.S. Department of Energy announced that it has approved $465 million in low-interest loans for San Carlos, California-based Tesla.

In his post on the company blog, on Monday, Musk labeled Eberhard as someone who falsely "plays to a common archetype – that of the noble inventor whose invention is usurped by the rich and powerful businessman." Musk goes on to take several shots at Eberhard, including this one: "…when Eberhard was asked to leave Tesla, most of the work that he had been paid to do had to be redone."

But with the news of $465 million in loans, Musk and Tesla have a chance to refocus their attention on the business. The company says that $365 million of the financing will be used for "production engineering and assembly" of it's forthcoming electric sedan, the Model S. This second car in the Tesla line is expected to start at $49,900 after a $7,500 federal tax credit, the company said.

The remaining $100 million will go toward a new manufacturing plant, out of which battery packs and other electric car components will be produced not only for Tesla vehicles, but also for "other automakers" including Daimler, which purchased a 10 percent stake in Tesla in May.

The Department of Energy also announced that it has approved $7.5 billion in similar loans for Ford and Nissan.

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    • Jason Del Rey

    Senior reporter Jason Del Rey covers technology, branding, and company culture for Inc. magazine and contributes to the From the Reporters daily blog. Before joining Inc., his work appeared in Newsday, The (Newark) Star-Ledger, and the Staten Island Advance, and on ESPN.com. He lives in New York City.


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