Published on May 23rd, 2013 | by Zachary Shahan6
Tesla Pays Off Government Loan 9 Years Early
Tesla Motors announced late in the day yesterday that it has now completely paid back its Department of Energy loan. It also noted that it is the only American car company (of any kind) to have fully repaid the US government. It’s been somewhat sad and somewhat hilarious watching anti-EV (i.e. pro-oil) media companies, politicians, and their followers try to bash and belittle the electric car revolution and its prime pioneer, Tesla. As Tesla succeeds more and more, however, the bashing has been turning to praise in some corners. I guess that’s simply how progress works. More commentary on the announcement below is coming soon, via CleanTechnica Senior Reporter Tina Casey. In the meantime, here’s the full announcement from Tesla Motors (obtained via email, image added):
Palo Alto, CA – May 22, 2013 — 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.”
Tesla Motors’ (NASDAQ: TSLA) goal is to accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars. California-based Tesla designs and manufactures EVs, as well as EV powertrain components for partners such as Toyota and Mercedes. Tesla has delivered more than 10,000 electric vehicles to customers in 31 countries.