03/07/2009 10:00:00

US Government supports electric car

The first electric car to do more than 200 miles per charge is to get $465 million (£398m) in low-interest loans from the US Department of Energy.

Tesla Motors will use $365 million of that windfall to produce the seven-seat Model S, which is billed as being able to travel up to 300 miles between charges.

Production of the car, the first US- and EU-certified lithium-ion battery electric vehicle (EV), is expected to start in late 2011 at a state-of-the-art factory in California employing 1,000 workers.

The remaining $100 million will go on a powertrain-manufacturing plant to supply other manufacturers, and which will employ 650 people.

Tesla is best known for its high-performance Roadster, and later this month will begin delivering its second-generation Roadster and Roadster Sport, which promise even higher performance.

Says boss Elon Musk: "Tesla will use the loan precisely the way that Congress intended - as the capital needed to build sustainable transport."

Although expensive compared with conventionally-fuelled alternatives, the Model S will have lower lifetime-ownership costs thanks to lower electricity prices and reduced servicing and maintenance.

© Press Association 2009