Tesla's Electric Sedan: Under The Hood

The auto industry is in shambles from a crippled economy, but that hasn't stopped luxury automaker Tesla Motors from launching what it calls a "mainstream" $50,000-plus electric sedan.

Whether out of touch with economic reality or prescient, the San Carlos, Calif., startup unveiled Thursday a prototype of the Model S family sedan at the SpaceX rocket factory run by Tesla chief executive Elon Musk. The all-electric car seats five adults and two children and travels 300 miles on a fully charged battery.

The vehicle carries its own charger, so the car can be recharged on the road from a 120-volt household outlet, as well as 240-volt and 480-volt outlets. With the last, the car can be recharged in 45 minutes, according to Tesla.

Tesla's other vehicle, the Roadster, is a luxury two-seater with an eye-popping sticker price of $109,000. In comparison, the Model S is downright affordable at a starting price of $57,400. Tesla is quick to point out that the car is eligible for a $7,500 tax credit for being all electric powered.

"It's truly the only car you need," Musk said in a statement. "Tesla is relentlessly driving down the cost of electric vehicle technology, and this is just the first of many mainstream cars we’re developing."

Nevertheless, it remains to be seen whether Tesla can be successful at a time when the auto industry is reporting multibillion-dollar losses and needs government bailouts to remain solvent as consumers cut back spending in the economic recession. Tesla is banking on receiving $350 million in federal loans to build the Model S assembly plant in California. The automaker has applied for the loans through the Department of Energy, but they haven't been approved.

In the meantime, Tesla is taking orders for the Model S and plans to start production in late 2011. The company says it has sold 300 Roadsters and has orders for nearly a thousand more. The sports car, which gets 244 miles on a charge and goes from zero to 60 mph in 3.9 seconds, is the only highway-legal all-electric car in the United States. It's built in England at the Lotus factory.

The basic version of the Model S is expected to go from zero to 60 mph in 5.6 seconds. Tesla has a production goal of 20,000 units per year and plans to offer three battery options. The entry-level auto will have a battery capable of a 160-mile range. The other options will have a 230-mile range and a 300-mile range.

Tesla had said it would build the Model S in San Jose, Calif. But on Thursday, Musk said it would be built in Southern California, the Los Angeles Times reported. The reason is that the DOE loans require that the factory be located in unused industrial sites at least 20 years old.

Tesla plans to sell its cars through its own showrooms. The company has one in Los Angeles and another in Menlo Park, Calif. Last month, the company said it has lease agreements for stores in Chicago and London, and is close to finalizing deals in New York, Miami, Seattle, and Munich.

Tesla's biggest rival in the electric-car business is Fisker Automotive, based in Irvine, Calif. The company plans to launch a plug-in hybrid sedan early next year at a starting price of $87,900, the Times reported. The Fisker vehicle was designed by Henrik Fisker, who worked at BMW and Aston Martin, and the Model S was designed by Fran von Holzhausen, who most recently worked at Mazda Motor.

The road to the launch of the long-delayed Model S has not been easy. Tesla in November removed CEO Ze'ev Drori, who had replaced Tesla co-founder Martin Eberhard. Eberhard was ousted in August 2007. In replacing Drori, Musk, a co-founder of PayPal, was forced to close the company's Detroit office and lay off workers.

Tesla also has had difficulty raising money and had to give up efforts last year to raise $100 million in venture capital.

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