On June 23, The Obama Administration announced $8 billion in loans to encourage car companies to continue the development of fuel-efficient vehicles. A lot of this money is going toward the development of electric cars.

Ford industry will receive $5.9 billion until 2011 for advancing engineering toward engine combustion and electric cars. Nissan will get $1.6 billion for producing battery packs and electric cars in Smyrna, Tennessee. Tesla Motor Company will receive $465 million. Tesla is a company headquartered in San Carlos, California, that makes electric cars.

"These investments will come back to our country many times over–by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions," said Energy Secretary Steven Chu.

There are three different types of electric cars: hybrid, fully electric and electric with backup. Tesla has two fully electric models that rely on no gas at all. Hybrids carry gas but use electricity when idling. The last type is represented by the Chevy Volt, which runs on electricity and has a backup gasoline generator that recharges the car’s batteries.

Tesla's loan will help them manufacture the Model S sedan, which runs completely on electricity and goes over 250 miles on a full charge. The car can hold seven people, and looks like a Maserati, according to Tesla. They will start releasing the Model S in 2011 at the price of $50,000.

Tesla’s other model, the Roadster, is all electric too but costs $101,500. The Tesla Roadster is a two-door sports electric car that can accelerate from 0 to 60 mph in 3.9 seconds. Car experts say that the development of the Model S shows that Tesla is working on making their cars cheaper.
According to Tesla Motors, an electric car is mechanically less complex than a normal internal combustion car. Software and electronics take the place of the machinery. Typically, the fewer parts, the more reliable something is.

The disadvantage of an electric car is the battery. Its heavy, expensive to make and offers limited power and range. But cars using batteries are environment friendly because they do not release CO2 into the atmosphere. The battery is made of lithium-ion, which can be recycled for money. According to Tesla the battery can power a car for 100,000 miles before it starts decreasing in performance. The transmission runs only on one gear so it as easy to drive as an automatic. The Model S is said to go from 0 to 60 in 5.6 seconds.

The other electric car in development is the Chevy Volt, which will launch 2010. According to GM, the Volt has a 40 mile range and then a gasoline generator produces energy for the battery.