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Tesla Motors To Pay Off Government Loan 5 Years Early 243

Posted by Soulskill
from the a-sure-sign-that-EVs-are-the-devil dept.
fredan sends word of a post at the Tesla Motors blog detailing how the company will be paying off its $465 million government loan 5 years early. Quoting: "This is a significant announcement both for Tesla and for the DOE. It is a marker of the successful launch of the Model S and the incredible market reaction to this award-winning car. And it is a tribute to the success of the DOE's Advanced Technology Vehicle Manufacturing Program (ATVM), a program which was chartered by Congress and signed into law by President George W. Bush, to accelerate the market for a broad range of promising automotive efficiency technologies — electric vehicles (EVs) principal among them. ... Following more than a year of thorough due diligence by commercial auditors, automotive consultants and lawyers, on January 20, 2010, Tesla became the recipient of one of three initial DOE loans announced by Secretary Chu, along with Ford and Nissan – good company for a start-up automaker. Tesla’s loan of $465 million was to be paid back over ten years following the start of production of the Model S. Months later in a separate announcement, an ATVM loan was announced for Fisker. It is worth noting that in comparison with these three other recipients, Tesla had the smallest loan. Ford’s loan was for $5.9 billion, Nissan’s was for $1.4 billion, and Fisker’s was for $529 million. ... We expect to generate sufficient cash and profitability in our business over the next five years that it gives us confidence to proceed with this early repayment of the loan. Moreover, it is also consistent with Tesla’s mantra of speed that we would, as Elon announced last week, accelerate the repayment of our loan, a full five years earlier than required under the original loan terms, making our last payment in 2017."
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Tesla Motors To Pay Off Government Loan 5 Years Early

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  • by ebcdic (39948) on Friday March 08, 2013 @12:06PM (#43117265)

    Oh wait, it *is* a press release.

  • They should make a long trip adapter like a generator that you tow behind you or strap on the roof that takes gas. I think that would really widen the cars appeal.

    • If you spend most of your time doing short trips, and occasionally do long trips, it makes perfect sense to rent a car for the longer trips.

      I lived for multiple years owning no vehicle...I could bike to work (or bus in the winter) and on weekends I could rent a small car for $15/day. Hard to beat that.

    • by fredan (54788)
      you mean like their supercharger? [teslamotors.com]
    • by Whorhay (1319089)

      The original design or concept actually called for a small generator being part of the internals of the car, but they scrapped the idea to stick with the 100% electric concept. I agree that it's a good idea and have brought it up in discussions before. If plugin electrics continue to gain in popularity I expect we'll start to see third parties making aftermarket solutions like this. The mini trailer or platform that hangs on the trailer hitch appeals to me the most. I wouldn't even be surprised if there wer

  • If the loan was at an expensive interest rate or included specific terms for what it could be used for, then being able to repay the loan early is good news for Tesla and anyone with an interest in their success.

    However if this was a cheap loan that was not tightly restricted, its an odd choice to repay cheap finance early. Didn't Tesla have anything good to put the cash on?

    • by jo_ham (604554)

      If the loan was at an expensive interest rate or included specific terms for what it could be used for, then being able to repay the loan early is good news for Tesla and anyone with an interest in their success.

      However if this was a cheap loan that was not tightly restricted, its an odd choice to repay cheap finance early. Didn't Tesla have anything good to put the cash on?

      It's good PR, whether it was cheap or not.

      They could buy marketing with it, or they could use the early repayment as good PR about how well they are doing.

    • Yeah this is what I was thinking. It's not neccessarily a smart accounting move to pay off your loan early, and usually comes with an opportunity cost. I however am not Elon Musk, so... good I guess?

    • It was a political loan, and the premature announcement of payback is political payback.
  • That it actually made the news. Obviously, this is the exception not the standard.

  • As usual, the truth is buried deep in the summary, and even deeper in the article.

    Tesla is not paying off the loan early - they're *intending* to pay off the loan early because they *expect* to generate "sufficient cash and profits" to do so.

    So far they've (with great effort) managed to get one model into production - but it's selling at a price such that their planned delivery rate cannot possibly generate enough cash. They've got some sidelines, but as above, the production rate is almost

    • by romanval (556418)

      First off: They have 2 car models: the first was the Tesla Roadster (which was based on a Lotus Elise) which was a testbed for their engineering. The Model S is designed from the ground up as an electric car.

      Currently they're only using about 20% of their manufacturing plant to build the Model S and plan to expand it for faster production of a lower priced car. That will also take huge capital costs, but the success of the Model S should reassure outside investors who passed on Tesla the first time aroun

  • If the government is going to spend money on innovation I think they should use it for scientific grants and make the discoveries public domain. That way it is not single companies that benefit from proprietary knowledge paid for with government loans, but rather humanity benefiting from royalty free technology. You also wouldn't need to worry about loans being repaid.

    For technologies where the government has no idea the direction research needs to go, this may not work. But for electric cars? It's obvi

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