Tesla to use loan money for new Model S electric sedan plant in California.

Secretary of Energy Steven Chu announced on Wednesday that the Department of Energy closed its $465 million loan with Tesla Motors, Inc. for the construction of two manufacturing facilities, one in southern California for the Model S electric sedan and one in Palo Alto, California, for electric powertrains.

The Palo Alto facility will assemble electric vehicle battery packs, electric motors, and electric vehicle control equipment for the all-electric sedan, Model S.

The long-awaited Model S will get anywhere from 160 to 300 miles on a single charge, Depending on the battery pack used. But what really sets the Model S apart from other EVs is that it will carry an onboard charger, which allows it to recharge from any outlet -- 120-volt, 240-volt, or 480 volt.

"We are honored that the US government selected Tesla to be among the first companies to participate in this visionary program," said Tesla CEO Elon Musk, in a statement released Wednesday. "This loan will allow us to further accelerate the production of affordable, fuel-efficient electric vehicles."

Volume production of the Model S is planned to begin in 2012 with a target production capacity of 20,000 vehicles per year by the end of 2013. According to Tesla, the Model S project and power-train manufacturing facility are expected to create over 1,600 jobs.

“This is an investment in our clean energy future that will create jobs and reduce our dependence on foreign oil,” said Secretary Chu. “It will help build a customer base and begin laying the foundation for American leadership in the growing electric vehicles industry."

Today’s announcement marks the second loan arrangement agreement signed by DOE with an advanced technology vehicle manufacturer. In September 2009, DOE signed its first loan agreement for $5.9 billion to Ford Motor Company. The Department has also signed conditional commitments with Nissan, Inc. and Fisker Automotive.

The company had previously considered developing its new Model S facility on a site in San Jose, but that deal fell apart.

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