Good breaking news today: Tesla Motors repaid its entire loan to the U.S. Department of Energy that it received in 2010. This ends all kinds of malicious talks about them not having money or the government failing to back successful companies in the alternative energy/transportation sector.
Here’s an e-mail I got from them a few hours ago (press release):
Tesla Motors (NASDAQ: TSLA) 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.Also read: This Device Extends Your Phone's Battery Lifespan Like Nothing Else. 5% Discount Code: GREENOPT
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.”
Well, they didn’t have to do this today – 9 years would’ve been more than enough. I guess this was too a matter of image, though. Elon and the board wanted to make a point here – they wanted to show strength and the faith that eventually, their electric car will sell better each year. Just like most debt-free companies, Tesla is now going upwards – and this is great news for the entire humanity.