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Tesla Repays $465 million Government Loan 9 Years Early

Tesla Motors announced that they are paying back the Department of Energy loan early.

May 22 2013, 10:51pm CDT | by

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Tesla Repays $465 million Government Loan 9 Years Early
 
 

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Tesla Repays $465 million Government Loan 9 Years Early

Elon Musk, founder of Tesla Motors does another cool thing. Tesla Motors repays the $465 million government loan nine years early. 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.”

With this move Tesla Motors takes away ammunition from critiques that the company is government funded.

Update:
Chrysler corrects Tesla with a statement posted here. Chrysler has already paid back government loans two years ago. Chrysler was six years early. Tesla is therefore not the only car company that paid back their loans.

 

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<a href="/latest_stories/all/all/2" rel="author">Luigi Lugmayr</a>
Luigi Lugmayr (Google) is the founding chief Editor of I4U News and brings over 15 years experience in the technology field to the ever evolving and exciting world of gadgets. He started I4U News back in 2000 and evolved it into vibrant technology magazine.
Luigi can be contacted directly at ml@i4u.com.

 

 

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