Tesla Motors Repays Entire DoE Loan, That’s 9 Years Ahead of Schedule (UPDATE)

4 years ago by Eric Loveday 15

Musk Tweets DoE Loan Payback Could Happen as Early as Wednesday

Musk Tweets DoE Loan Payback Could Happen as Early as Wednesday

Model S Drifts

Model S Drifts

Elon Musk is back at it again on Twitter.

This time the news couldn’t be more positive.

According to Musk, Tesla Motors aims to fully repay its DoE loan by tomorrow.

The only downside here is that the Supercharger announcement has been pushed back one more week.

Musk tweeted:

“Given govt loan repayment this week (prob Wed), Supercharger update will be next week.”

That's the Full Repayment Musk is Referring to Here

That’s the Full Repayment Musk is Referring to Here

According to Automotive News, a “Tesla spokeswoman confirmed that Musk was referring to the full repayment of the DOE loan.”

Of course, Tesla is making use of an expanded stock offering to pay off its $452.4 million debt to the DoE, but that matters not to us or anyone else in the automotive kingdom.

If Tesla pays its debt in full, then it’ll become independent of the US government.

More impressively, if Tesla does make that payment on Wednesday, then the automaker will have paid off its loan 9 years ahead of schedule.  Yes, that’s 9 years!!!

UPDATE:  It’s a done deal…See Press Release and Musk Tweet Below  (Adds DoE Comment Further Down Below)

musk tweet

Tesla Repays Department of Energy Loan Nine Years Early

Only American Car Company to Have Paid Back Government

Wednesday, May 22, 2013

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.”

Moniz: Tesla Repayment Shows the Strength of Energy Department’s Overall Loan Portfolio

WASHINGTON — Today, Tesla Automotive repaid the entire remaining balance on a $465 million loan from the Department of Energy nine years earlier than originally required.  U.S. Energy Secretary Ernest Moniz made the following statement:

“When you’re talking about cutting-edge clean energy technologies, not every investment will succeed — but today’s repayment is the latest indication that the Energy Department’s portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated. 

“More than 90 percent of loan loss reserve Congress established remains intact, while losses to date represent about 2 percent of the overall $34 billion portfolio.  The other 98 percent of the portfolio includes 19 new clean energy power plants that are adding enough solar, wind and geothermal capacity to power a million homes and displace 7 million metric tons of carbon dioxide every year – roughly equal to taking a million cars off the road. 

“The Department first offered loans to Tesla and other auto manufacturers in June 2009, when car companies couldn’t get other financing and many people questioned whether the industry would survive.  Today, Tesla employs more than 3,000 American workers and is living proof of the power of American innovation.  This is another important contribution to what the Obama Administration has done to preserve and promote America’s auto industry.

“Finally, this announcement is also good news for the future of America’s growing electric vehicle industry.  While the market has taken longer than predicted to get going, sales of electric vehicles in the U.S. tripled last year and are continuing to increase rapidly in 2013.  Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market.”

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15 responses to "Tesla Motors Repays Entire DoE Loan, That’s 9 Years Ahead of Schedule (UPDATE)"

  1. David Murray says:

    This should add more legitimacy to Tesla in the eyes of the Obama-hating crowd.

    1. vdiv says:

      The Obama-hating crowd already have different angles of attack. They claim that Tesla is still being subsidized through the $7500 federal tax credit + the available state credits + the zero emission vehicle credits. And when that is resolved they will pull NASA’s COTS funding for SpaceX and PV panel incentives for Solar City. Then they will scare people about blackouts, making them live like Europeans, and the environmental impact of lithium mining, electronics and motors production and how the gov’t once again turns a blind eye while persecuting the fossil fuel industry. There is no end, nor reason for the hatred.

      1. kdawg says:

        If you wan’t to keep the ‘politics’ out, then you could just re-phrase your statement to say “EV-hating” crowd, and let people come to their own conclusions.

      2. Ivo says:

        what do you mean by “making them live like Europeans”? from an European…

  2. Gary C says:

    I totally disagree with Obama….I totally love Tesla-Volt and other electric plug-ins…so drop the politics already!!!

    1. Brian says:

      We need more people like you to speak out. There are a lot of people who can’t see past their politics, and they tend to be the outspoken ones!

      For the record, I disagree almost everything Obama has done, too.

    2. David Murray says:

      Maybe you misunderstand.. I’m actually a conservative myself. But I also understand that there is a small but very outspoken part of my party that can’t see past their hatred for Obama and thus anything associated with him must be bad. (why these cars are even associated with him even baffles me, to be honest) And thus more of us need to speak out.

    3. g.r.r. says:

      Gary, you are the exception, not the rule. The fact is, that overall the republicans HATE Tesla, electric cars, etc.

  3. kdawg says:

    So will the supercharger announcement also be the same announcement regarding Elon’s tweet that you could charge a Tesla faster than filling a gas tank?

    1. Josh says:

      From my understanding SuperCharging is part 4/3, then the “mystery announcement” will be part 5/3 (presumed battery swapping of some kind). He has not said he is combining them, so my guess is that SuperCharging will be next week and the following week will be “mystery, under your nose, announcement.”

      IMO the SuperCharging announcement will be immediately beneficial to Tesla and their owners. I think Musk is looking to make a splash with progress on the deployment (20+ to be ready now or very soon) and an upgrade to 120 kW (+33%) charging rate. The final announcement might be a little lackluster, as it will likely display a capability that most owners will rarely use and not be free like the SuperCharging.

      1. kdawg says:

        What were the first 3 announcements?
        Lease deal
        Paying back loans
        and?

        1. Josh says:

          First announcement was profitability, second was “lease” deal (3 year buy-back), and third was new service strategy.

          DoE payback was not part of the original plan. When the stock price exploded after the Q1 report, they seized the moment and and filled their coffers with cash for paying off DoE loan and probably Model X tooling/production ramp costs.

          1. Nelson says:

            I hope Tesla can make the Model S, Model X and Roadster 2 simultaneously someday.

            NPNS!
            Volt#671

            1. g.r.r. says:

              Skip roadster 2 for the moment. Instead, Bluestar will be up front.

  4. Koz says:

    Just think if the gov’t hating crowd was not pressuring Tesla. They could be putting the $400+M to good use accelerating Model X and the next gen, lower cost Tesla as intended by these loans that had their impetus during the Bush admin. Instead, to silence some loud mouths and bad press, development is delayed a year or so. The main thing standing between Tesla and proliferating the Model S’ platform to other models and scaling there operation (R&D, stores, service centers, superchargers, etc) is cash. Scale is what Tesla needs the most (along with the next iteration or two in battery development) to be able to develop and offer their lower cost, next generation platform.