Opinion: Funds for clean car tech should not be unfocused to Big 3 bailout

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Congress is debating the auto industry "bailout" this week, and the aftereffect will accept astronomic implications from Detroit to Silicon Valley, not to acknowledgment on consumers, accessible action and the environment.

At pale is the Advanced Technology Cars Manufacturing Loan Program, which the Department of Energy administers. The affairs provides new and accustomed automakers and suppliers with low-interest loans and added incentives so they may body fuel-efficient cars and get them to barter faster.

After Congress appropriate $25 billion for the affairs in September, the abridgement cratered. November car sales were the everyman in 26 years. Detroit automakers accolade to acquisition a band-aid to bound annihilative banknote reserves.

The Detroit Three asked for some of the $700 billion Troubled Assets Relief Affairs for the accounts industry. When the White House refused, automakers focused on the Advanced Technology Cars Manufacturing Loan Program, aggravating to adapt it as a bailout.

Although some on Capitol Hill don't grasp or acknowledge the distinction, make no mistake: Diverting a progressive program for next-generation car technology into a general bailout would be a dangerous and sad irony: The Detroit Three have resisted building hybrids and electric vehicles for decades.

The Detroit Three say they need cash to avoid firing millions of workers. But mortgaging the future to cover up the auto industry's mistakes would

have dire consequences for the next generation. Last month, President-elect Barack Obama outlined an economic recovery plan that could put 2.5 million Americans to work, many of them in "green collar" jobs building wind turbines, installing solar panels and developing fuel-efficient cars.

California is already showing that America needn't buy into the specious argument that pits the environment vs. the economy: In October, the University of California-Berkeley released data showing that the state's energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007 and boosted salaries by $44.6 billion.

San Carlos-based Tesla Motors is applying for $400 million in federal loans. These are not handouts. Rather, the funds would support two projects: The first would supply recyclable batteries and components for other automakers hoping to produce more fuel-efficient vehicles. The second would help finance a manufacturing facility to make a five-passenger family sedan — all-electric and zero-emission, freeing owners of petro-state dictators, OPEC-mandated price fluctuations and Big Oil oligopoly.

Since its creation nearly five years ago, Tesla Motors has directly addressed the crises of energy security and climate change. Tesla is already producing the all-electric, zero-emission Roadster, which delivers double the efficiency and generates one-third the carbon dioxide of popular hybrids. The sports car is the technical validation and precursor to a planned family sedan and subcompact in Tesla's product pipeline — evidence that EV technology is already viable.

Those who question whether the government should fund a company building a $109,000 sports car don't understand a cardinal rule of the tech industry: Early generations of any breakthrough product are always expensive. Cellular phones in the 1980s cost $2,000. So-called early adopters are willing to pay more for the newest items, amortizing R&D and subsidizing later buyers.

Hardware also becomes more affordable within several product cycles, whether on the time frame of Moore's Law (for semiconductor-based electronics) or, in the case of Tesla's lithium-ion battery capacity, at the fair clip of 8 percent per year. That's how Tesla will move from a six-figure sports car to a $57,500 sedan to a $30,000 subcompact within several years.

Given the tight venture capital lately, a government loan to Tesla would speed delivery of more affordable vehicles that eliminate dependence on foreign oil and reduce drivers' carbon footprint. Tesla is applying for the loans in the truest spirit and intent of the Advanced Technology Vehicles Manufacturing Loan Program. I don't endorse corrupting it — nor should the American public.

Elon Musk is chairman, CEO and product architect for Tesla Motors Inc. He wrote this article for the Mercury News.