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Tesla Roadster
Tesla Motors asks the government for much-needed funds

While the traditional auto industry appears to be in a free fall with industry giants like General Motors, Chrysler, and Ford take the brunt of the hits; electric car companies are also facing similar hardships. DailyTech reported last week that the electric car industry is also noticing a steep downturn in sales.

Tesla Motors has been a headliner when it comes to electric vehicles thanks to its Roadster which features a $100,000+ price tag. However, the downturn in the economy forced the company to fire 90% of its employees in Rochester Hills, Michigan. In an incredibly tacky move, employees first found out about the layoffs from automotive blogs and then later from the corporate website.

It appears that the worst is not over for Tesla Motors. According to The Detroit News, the company is joining GM and Chrysler and is asking for a cash infusion from the government. Tesla Motors’ CEO Elon Musk is asking the government for a $350 million loan.

"We can't move forward with that without a major amount of capital," proclaimed Musk. "If we don't get any government funding, then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now."

According to Musk, the money will used to build a $250 million assembly plant in California and develop its four-door, all-electric Model S sedan which will be priced less than $60,000. Without the low-interest loan, the company will have to delay the introduction of the vehicle.

If Tesla Motors is indeed approved for the $350 million, the money will come from an existing $25 billion Department of Energy fund that was put in place to stimulate the development of "green" vehicles.

Tesla Motors' sole current offering is the Roadster. The two-seater is priced at $109,000 and has a driving range of 220 miles. The vehicle can accelerate to 60 MPH in less than four seconds and can reach a top speed of 125 MPH.





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