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Tesla Gets $10 Million Of California Cash To Build Model X Crossover

 
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2014 Tesla Model X all-electric crossover with 'Falcon Doors' open

2014 Tesla Model X all-electric crossover with 'Falcon Doors' open

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Yesterday, the California Energy Commission approved a $10 million grant to Tesla Motors which it said would help the electric automaker prepare for the launch of its second mass-produced car, the Tesla Model X Crossover SUV. 

Under the terms of the agreement, Tesla will have to match the $10 million in grant funding with $50 million of its own funds. 

The $10 million will be used by Tesla Motors  [NSDQ:TSLA], to expand capacity at its production facility in Fremont, California, where the 2012 Model S Sedan is already made. 

This will include the purchase of new manufacturing equipment needed to make components for the all-new electric crossover, as well as the hiring of an additional 700 workers when the Model X starts production in 2014. 

Unveiled earlier this year at an exclusive event in California, The Model X will be Tesla’s second mass-produced, and third overall, electric car. 

With seating for seven adults, Porsche-beating performance, and its famous falcon wing doors, the Tesla Model X is being marketed as having the practicality of a minivan, the luxury of an SUV, and the performance of a sportscar. 

According to Forbes, those present at the energy commission meeting in Sacramento, where Tesla was awarded the grant, were keen to see the Model X make it to market. 

Tesla Model X - Official Debut, Los Angeles, February 2012

Tesla Model X - Official Debut, Los Angeles, February 2012

Enlarge Photo

“Tesla has the unique distinction of being the only automaker to actually ask us to increase our targets under zero emission rules,” said Ryan McCarthy, science and technology policy advisor to the chair of the California Air Resources Board. 

“I think the Model X is going to be the next embodiment of delivering on that unique vision and capability,” he continued.

The funding announcement comes as Tesla is preparing to start repayments of $465 million of low-interest loans under the Advanced Technology Vehicle Manufacturing program form the U.S. department of Energy.

Tesla CEO Elon Musk has claimed the automaker will be cashflow positive by the end of 2012. 

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Comments (5)
  1. cash flow positive by end of 2012 is ambitious but does not imply the ability to pay off the loan. i wish them well. Tesla's sucess will help push the EV envelop for Electric vehicles at all price points
     
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  2. Porsche-beating performance? Please be more precise... 356, 914, 944, 911, 918? Irregardless, $10M from cash-strapped Californians? I hope they like what they get for their investment.
     
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  3. Joe, that $10 million is a whopping $.30 per capita for Californians. I would guess most are pretty happy to have an employer hiring workers and growing at a factory that was previously empty (after NUMMI closed) and was not likely to ever be used again.

    Views may vary, but the subsidy pales in comparison to the much larger ones granted to other factories recently in the south. 15 years no taxes, land given for free, etc...
     
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  4. As much as I love Tesla and support its view of building the best "car" in the world, I disagree with this decision by California.

    I think California has enough other issues to worry about. Even with its intent of funding green cars, instead of giving Tesla $10Million, it could have been better used to fund green rebates (higher ones) to encourage average people buying EVs and Plugin hybrids and EREVs... Massive buying of those clean vehicles is better than just funding a "luxury" project by Tesla.

    Personally, I think Tesla would be better spending R&D money on the $30K Tesla sedan and CUV instead of Model X...
     
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  5. The $30K Tesla will come in due time. For now, Tesla needs to focus on profitability and that means luxury vehicles.
     
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