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Electric cars get a boost

Tara Baukus MelloThe Department of Energy recently released about one-third of a $25 billion loan program to automakers to create advanced technology vehicles that reduce America's dependence on foreign oil.

Ford Motor Co., which plans to produce an electric version of the Focus, and Nissan Motor Co., which has said it will produce an electric sedan, were awarded low-interest loans. But Tesla Motors, a small electric-only automaker in San Carlos, Calif., may have received the biggest boost toward making mass production of its vehicles a reality.

With a $465 million loan awarded from the program, Tesla says that most of the money -- $365 million -- will go toward accelerating production of its Model S, an all-electric sports sedan that can travel up to 300 miles on one charge and recharge in as little as 45 minutes.

About $100 million will be used for a powertrain manufacturing facility that will act as a supplier to Tesla and other automakers producing electric vehicles, the company says. One of its customers will be Daimler's Smart brand. The German car company bought a 10 percent stake in Tesla in May.

Tesla is considered a boutique automaker, with very small volume. Since 2007, it has produced one model, the Tesla Roadster, delivering barely more than 500 cars to customers. The Roadster, a high-performance sports car, is the only highway-capable electric vehicle available in the U.S. It accelerates from 0 mph to 60 mph in 3.9 seconds, travels 244 miles per charge and retails for $101,500 after federal tax credits. This month, Tesla is scheduled to begin delivering the second-generation Roadster and the Roadster Sport, a high-performance version of the Roadster that goes from 0 mph to 60 mph in 3.7 seconds.

Its new Model S is designed to be a mainstream, mass-produced sports sedan with a starting price of $49,900 after federal tax credits. The spacious sedan will seat five adults and two children, and the all-electric powertrain is under the floor, resulting in cargo space under the hood and a trunk in back.

With its fold-flat rear seats, the Model S can store a 50-inch television, a mountain bike and a surfboard all at once, Tesla says. Three battery pack choices will be available, offering a driving range of 160, 230 or 300 miles per charge. Tesla is currently taking orders for the car, which is expected in late 2011.

While its all-electric concept is unique, Tesla also intends to change the typical customer experience at its stores for sales and service. "We are rethinking almost every aspect of the automobile," says Elon Musk, Tesla's chief executive and product architect.

Looking at the success of customer-focused retailers such as Starbucks, Tesla has created sales and service centers that encourage customers to have a relaxed visit. The automaker wants to do more than just give them product information or take them on a test drive. Customers can enjoy such comforts as a free Wi-Fi so they can get a little work done while waiting.

Two company-owned stores in California, in Menlo Park and Santa Monica, opened a year ago. Four more stores are expected to open in the next few weeks. Those new stores will be in New York, Seattle, Chicago and Miami.

Tesla is already establishing itself as a company that goes the extra mile for its customers. When the Roadster had a safety recall this spring, the company sent technicians to owners' homes and offices to do the repairs, instead of requiring owners to visit a repair center.

While mainstream, mass-produced cars may be a couple of years away, Tesla's concept of creating stylish, zero-polluting vehicles and customer-focused service centers may be an idea whose time has most definitely arrived.

Read more Driving for Dollars columns and Bankrate auto stories.

Tara Baukus Mello is a freelance writer who has written about automotive topics of interest to consumers since 1995. If you have a car question, e-mail it to us at Driving for Dollars.

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