Posted on 05/22/2013 11:26:40 PM PDT by Vince Ferrer
PALO ALTO, Calif.-- Tesla Motors announced that it has paid off the entire loan awarded to the company by the Department of Energy in 2010. In addition to payments made in 2012 and Q1 2013, today’s wire of almost half a billion dollars ($451.8M) repays the full loan facility with interest. Following this payment, Tesla will be the only American car company to have fully repaid the government.
For the first seven years since its founding in 2003, Tesla was funded entirely with private funds, led by Elon Musk. Tesla brought its Roadster sports car to market with a 30% gross margin, designed electric powertrains for Daimler (Mercedes) and had done preliminary design of the Model S all before receiving a government loan.
In 2010, Tesla was awarded a milestone-based loan, requiring matching private capital obtained via public offering, by the DOE as part of the Advanced Technology Vehicle Manufacturing program. This program was signed into law by President Bush in 2008 and then awarded under the Obama administration in the years that followed. This program is often confused with the financial bailouts provided to the then bankrupt GM and Chrysler, who were ineligible for the ATVM program, because a requirement of that program was good financial health.
The loan payment was made today using a portion of the approximately $1 billion in funds raised in last week’s concurrent offerings of common stock and convertible senior notes. Elon Musk, Tesla’s Chief Executive Officer and cofounder, purchased $100 million of common equity, the least secure portion of the offering. “I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate,” said Elon Musk. “I hope we did you proud.”
What is the point?
Government has no business making loans in the first place
Didn’t Chrysler repay back in the 1980s?
Let’s see...
The business fails, the executives paid themselves handsomely and the taxpayers pay for it all.
The business succeeds, which is rare, the executives make out handsomely and the taxpayers aren’t on the hook.
Where’s the upside for the taxpayer?
Where’s the downside for the executives?
Corporatism and fascism all rolled up into one...
[[Tesla Repays Department of Energy Loan Nine Years Early]]
Dummies- they hsioudl have defaulted, and then pleaded the fifth AFTEr statign they are innocent of all charges
I think they did. What I think Tesla meant was a department of energy loan, but I am not sure.
I agree, but I am glad someone actually could pay it back, rather than just go bankrupt.
Tesla was able to payoff because of a recent stock offering. Who bought the stock? The FED? Gov’t pension administrators? Banks and Wall St with TARP funds? Fannie and Freddie? Friends of Democrats? This smells like Shiite-lery’s cattle futures windfall. Nothing but money laundering.
Is this like the BS when GM bragged about “Paying Back”...they paid it back with a NEW LINE OF GOVERNMENT CREDIT?
Doesn’t matter anyway. Tesla got government advantage that other, possible competing companies, did NOT get.
Unconstitutional.
The money could have easily been raised in the private sector.
The problem?
The private sector would have demanded a much higher rate of return on their investment, including a substantial equity position.
I’m glad the taxpayers got repaid, but our compensation was pitifully small when compared to the risk.
Tesla is the stupidity tax for college-educated liberals.
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