The government rides $465 mil on Tesla
It was announced yesterday that Tesla Motors will receive $465 million from the Federal government in low interest loans. The loan was part of an $8 billion dollar package-6 billion of which goes to Ford and the rest to Nissan- designed to invest in efficient car technologies, and to save jobs.The money for Tesla is to be used specifically to "build a plant in Southern California to make its new Model S sedan...[and] later for a plant in Northern California to make battery packs and electric drivetrains to be used in other carmakers' vehicles."The question is, how much of a gamble does this represent?Tesla, along with its 6-figure roadster and predicted $50-60,000 sedan, was featured in GOOD's transportation issue ("Don't Kill Your Car," along with others), and produces a number of results when GOOD searched. In many instances it is heralded as an industry leader in fuel efficient vehicles, but what are the potential pitfalls?Gawker writes of the "firm's recent struggles with liquidity and shakedown of customers for more money. It also must have been tricky to sell the Model S itself, given that Tesla has been showing off a "barely ambulatory" prototype, in the words of the Los Angeles Times."This CBS article also has some concerning criticisms: "Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract."So is the government taking a big gamble? Is there a market for the $50,000 sedan? Is there a better way to spend the money? Perhaps rail?