Cars powered by electrons not too far in the future

The California-based electric car start-up has filed papers to raise as much as $178 million of public money. Now the company is cash starved at present and $178 million are big bucks. Right after the IPO, it also stands to get $50 million from Toyota. In addition, the company has loan commitments from the US government to the tune of more than $450 million. All this exercise is targeted towards producing a relatively cheaper electric car called Model S next year. The Model S will cost less than $50,000 (you read it correct, $50,000 for a performance electric car is inexpensive). Tesla currently manufactures electric Roadsters and boasts of putting more than 1000 Roadsters on roads. A Roadster costs more than $100,000 on road.

Apart from the small number of Roadsters, the other things the company has been churning consistently are ever-increasing losses from its assembly lines. In the latest quarter ended 31 March 2010, the company booked losses of $29.5 million, a whopping 84 per cent increase from the same quarter last year. But there are enough takers for the electric cars. The ever disgruntled politicians and people constantly making it to the news channels will certainly support electric cars even if they are very costly. But the situation is changing fast with the model S, priced below $50,000, expected to hit the roads next year.

The whole idea of driving eco-friendly cars and not lining up at the gasoline station every week sounds interesting to say the least. Just plug the car to a wall socket during the night and the car gets ready for a 300 mile journey while the driver sleeps. More than half of the money raised from the IPO will go towards the production of Model S electric vehicle. One can actually imagine the roads getting swarmed by a number of these electron-powered cars after 3-4 years.