In its 2010 budget, the Obama administration put an end to funding for hydrogen fuel cell vehicle research, but Congress is putting that money back in. In the last two days, the relevant committees in both the House and the Senate have issued their versions of the Department of Energy budget. Both reduce investment in renewable energy compared with the president's budget, and direct money to research into hydrogen programs that the administration deemed too far away from reality to merit funding.

In an interview with Technology Review, Energy Secretary Steven Chu said that hydrogen fuel cell vehicles would require four "miracles" to become practical. Chu supports research into better biofuels and batteries instead.

The plan at Tesla Motors has always been to go beyond its first vehicle, the $100,000 electric Roadster, to make more-affordable electric cars--a plan that had come to depend on the startup receiving a hefty loan from the government. Today, the Department of Energy announced that it has approved that loan--in the amount of $465 million. The money could allow Tesla to bring its Model S electric sedan to market, as planned, by 2011.

The company said in a statement that $100 million will be used to construct a manufacturing facility for the company's electric power train (the battery, motor, and controls), which it plans to sell to other automakers. The rest will be used to engineer and build the Model S.

The base version of the Model S will sell for about $50,000. Tesla will offer three versions of the car with different ranges: 160, 230, or 300 miles. Even the smallest battery pack will give the vehicle more range than several planned electric cars from other manufacturers. Electric vehicles from Ford, Nissan, and Coda automotive, due out in the next couple of years, will have a range of about 100 miles.

Tesla has delivered about 500 of its Roadsters so far, and the company predicts that its Roadster division will be profitable this year.

The DOE loans are part of the $25 billion Advanced Technology Vehicles Manufacturing program, which was first signed into law in 2007 and appropriated last September. The DOE also announced today that it had approved a $5.9 billion loan for Ford, for developing advanced vehicles and retooling factories to make cars that use less gas. The DOE also approved a $1.6 billion loan for Nissan North America, which will be used to modify a factory in Smyrna, TN, to make electric vehicles and battery packs. Nissan plans to start selling an electric car in the United States next year, which will be made in Japan until the Smyrna plant is ready in 2012.