Tesla Motors will receive a long-sought $465 million loan to build a factory to build its planned Model S electric sedan, the U.S. Department of Energy said on Thursday.
With the loan, Tesla will be able to start making the Model S in volume during 2012 and ramp up to 20,000 units by the end of 2013. The location of the facility is expected to be in Southern California.
The Model S is one of a few highly anticipated electric cars coming out in the next few years. It's designed to go over 300 miles on batteries, be large enough to carry five adults and two children, and still have lots of cargo space. The base price for the car will be almost $49,900.
For Tesla, the loan allows it to move ahead with its production plans in a difficult environment for raising the large amounts of capital needed to build a factory.
A number of other automakers invested in electrification will also receive Energy Department loans to encourage domestic auto manufacturing. Ford Motor received a $5.9 billion loan and the Energy Department has made conditional commitments to Tesla competitor Fisker Automotive and Nissan North America, which plans to introduce the all-electric Leaf later this year.
In a statement, Energy Secretary Steven Chu said the loan program is an effort to "lay the foundation" for the electric-vehicle industry.