Tesla Motors unveils electric car prototype

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HAWTHORNE, Calif. — With a grin and a theatrical flourish, the chief designer of Tesla Motors unveiled Thursday what the fledgling automaker hopes will be the family friendly, mid-sized sedan of the future.

"Welcome to Model S," declared designer Franz von Holzhausen as he pulled the covers off a pair of prototypes of the all-electric-powered sedan the company said will seat seven people and travel 300 miles on a single charge.

Tesla hopes to begin producing the flashy, five-door car at a yet-to-be-disclosed location in Southern California by the final quarter of 2011.

Within a year, it wants to turn out as many as 20,000 of the vehicles annually.

Von Holzhausen headed a team of designers that built the cars at the futuristic SpaceX Rocket Factory, where they were unveiled.

Tesla CEO Elon Musk got behind the wheel of a gun-metal gray model with white interior and sunroof and drove it right out of the building to prove it really would run.

Musk said the company had yet to determine what it will charge for the top of the line model that goes 300 miles on one charge. And no final decision has been made on what options will be available at extra cost.

A model with a range of 160 miles per charge will cost $49,900 after a $7,500 rebate from the government for car buyers who go all-electric.

"What we're hoping this car will do is show the car industry that it's possible to create a very compelling electric car and a very compelling price," Musk said.

The top-of-the-line battery, with about 8,000 cells, will take four hours to recharge at a cost of about $5 at current electricity rates. It can take a quick charge in about 45 minutes.

Anticipating that gas prices will increase to $4 a gallon within the next three years, Musk said a buyer could save as much as $15,000 on gas over the life of the car, after the cost of electricity.

He said he was confident the company would secure $250 million to $350 million in federal loans to begin production.

"This car will be manufactured. It will come to market," Musk said.

The sporty-looking, five-door hatchback resembles a Ford Mustang. It can seat five adults, with two children in the back, as in an old-style station wagon.

Without passengers, the back of the car can be used for storage.

The prototype was displayed nearly a year after Tesla brought its sleek, pricey, two-seat Roadster sports car to the market. The basic price for the Roadster is $109,000.

Tesla, named for Nikola Tesla, a pioneer in developing practical, efficient uses for electricity, was founded in 2003 with $40 million in venture capital from investors such as Google co-founders Larry Page and Sergey Brin.

The company has yet to turn a profit.

Last month, Musk, the co-founder of online payment service PayPal, said Tesla had secured another $40 million in financing from investors, putting it on track to become profitable by midyear.

The Roadster has so far been a hit with the critics. The high-end buyers' guide The Robb Report declared it "the literal and figurative buzz of the industry."

Still, the sports car is largely a niche model for the wealthy.

"The first thing to note is that the Roadster is not a car for most people, or even your typical Porsche enthusiast. It is a car for technology buffs who relish being on the cutting edge," Associated Press Auto Writer Dan Strumpf reported earlier this month after a test drive.

Tesla said it has delivered about 250 Roadsters and has a waiting list of about 1,000 customers who have placed deposits.

Wait time for delivery is currently about six months, said Jeremy Snyder, general manager for Tesla Motors, Southern California.

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