What will Apple’s role be in the car industry?

Here’s an interesting interview with Elon Musk who believes Apple will eventually be a “direct competitor” in the car industry. Interesting . . .


Will Tesla get a government loan?


Will Tesla get its loan? It’s not clear at this point.

Tesla Motors said its long-awaited $450 million loan from the federal government could come as soon as this summer, a crucial factor in its plans to build an electric-car factory in California.

“I am excited to report that the Department of Energy informed Tesla last week that they expect to disburse funds … within four or five months,” Elon Musk, Tesla’s chief executive and chairman, wrote in a newsletter distributed to customers Wednesday.

Tesla, based in San Carlos, stopped short of saying its loan application had been approved. Indeed, an Energy Department spokeswoman said Wednesday that her agency “has made no final decisions for specific applications for the auto-loan program.”

Still, Tesla is optimistic the department will approve its request for money from the $25 billion loan program to retool U.S. factories to make more fuel-efficient cars and trucks, said Diarmuid O’Connell, the company’s director of corporate development. Tesla has asked for $350 million to retrofit a factory to assemble its Model S electric sedan and $100 million for its battery-supply business.

“We have a high degree of confidence,” O’Connell said. For one thing, he said, Tesla has asked for a small amount compared with the Detroit Three automakers, which have requested $5 billion or more each.

Of the 75 companies that requested funds under the program, only 26, including Tesla, were told that their applications were “substantially complete,” he said.

I’d like to see them get it. The technology is impessive, and Musk hasn’t been shy about putting his own money behind the venture. BusinessWeek explains that Tesla needs to convince the government that it has a viable strategy.

Eager to build a sedan, Musk is pinning his hopes on the U.S. Energy Dept. The DOE is offering two kinds of credit lines: one for companies working on alternative energy projects and another for carmakers developing green vehicles. Automakers may apply for both kinds of credit, which they can access as projects hit key milestones.

To qualify for DOE money, Musk needs to prove Tesla is viable. “We’ll be profitable in five months,” he says. He also needs to raise tens of millions of dollars in matching funds. In what some industry watchers deem an act of desperation, Musk aims to ask potential buyers of the new sedan to pay a big chunk of the $50,000 sticker price up front. Yet the car won’t be ready until 2011—and only if the government gives him credit. Musk acknowledges customers would put “their money at risk.” He also has been trying to get Roadster owners and buyers to fork over $12,000 for a future replacement battery—even though the one in their cars is supposed to last well into the next decade.

Tesla is making other changes to get money fast. The company has scrapped plans for a brand-new factory in San Jose, Calif., opting instead to look for an old, idle industrial site where it could build a factory to make Model S cars and batteries. Tesla needs government loans for both projects, and loan applications that intend to use existing facilities get preference from the DOE. So Tesla may get money faster that way, if it gets approved. The company says it is negotiating deals for some industrial property for both sites and may have news soon.

Companies like GM have the advantage of scale, but Tesla’s all-electric sedan could be a sensation.


Tesla update


Tesla has been in the news quite a bit as CEO Elon Musk tries to address all the turmoil at the company. John Calacanis is a proud owner of a Tesla Roadster, and he jus published a letter Musk has sent to Tesla owners.

As mentioned in a prior update, we delivered our 100th Roadster last month. Since then, we have delivered over 60 more cars to customers and will continue delivering cars at a rate of 15 per week (excluding holidays), rising to 30 per week in the spring. By the end of 2009, we will have delivered over 1,300 Roadsters in the United States and Europe.

Tesla is in the fortunate position of being sold out through October this year and we continue to add new sales each month, despite the negative economic climate. As a result, we expect to turn the corner on profitability by the middle of 2009, shortly after we reach our target of 30 per week production rate for the Roadster.

Due to our order backlog, it seems that owning a Roadster can be a smart investment. In November, well after the markets crashed, a Roadster was sold at the Happy Hearts Fund auction in New York City for $160,000. The first buyer then donated the car back to the charity and they resold it that same night for $150,000. Many Roadster owners that have taken delivery of their cars have already decided to purchase a second Roadster or Roadster Sport because they like the first one so much. And the Roadster has become the car to own for environmentally conscious celebrities, business leaders, and even royals.

Looks like things are stable at the company. Musk also addresses a partnership with Daimler to produce an all-electric version of the Smart Car. Good stuff.


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