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  (Source: airspacemag.com)
Tesla's early repayment is mainly due to last week's announcement regarding its plan to issue more stock and pay off the energy loan with the proceeds

Tesla Motors announced today that it has repaid its $465 million energy loan in full nearly a decade early.  

"I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the [loan] program, and particularly the American taxpayer from whom these funds originate," said Elon Musk, Tesla co-founder and CEO. "I hope we did you proud."

Tesla was approved to receive a $465 million loan from the U.S. Department of Energy (DOE) in June 2009. The loan, which was part of the Advanced Technology Vehicles Manufacturing program, was to be repaid by 2022. But in March of this year, Tesla received permission to pay the loan back five years early by mid-2017. 

But now, Tesla has repaid the whole sum -- nine years earlier than expected from the original 2022 due date.

Tesla's early repayment is mainly due to last week's announcement regarding its plan to issue more stock and pay off the energy loan with the proceeds. Tesla said it wanted to sell about $830 million in shares, and use $450 million in convertible senior notes (which are due in 2018) along with sales of 2.7 million shares (valued at about $229 million at the time) to pay back its federal loan.


Tesla Model S

Also helpful to Tesla's cause is the fact that it managed to start shipping 500 Model S sedans per week starting in March of this year, exceeding the sales outlook of 4,500 posted in the February shareholder letter. In fact, Tesla managed to sell 4,900 Model S sedans in the first quarter. The automaker plans to deliver 21,000 total for the year, which slightly exceeds previous forecasts of about 20,000. 

Tesla reported its first profitable quarter in Q1 2013, where it posted a net income of $11.2 million (a huge increase from an $89.9 million loss in the year-ago quarter). Excluding certain items, Tesla's profit came in at 12 cents a share, which was a boost from a loss of 76 cents a share in Q1 2012. Analysts expected a profit of about 4 cents a share. Revenue also saw a huge year-over-year boost, totaling $562 million (up from $30.2 million in the year-ago quarter). 

Tesla is certainly looking to keep that momentum going, and is doing by extending excellent service beyond the point of sale. Last month, the automaker announced a new battery replacement program as well as new service programs, which feature valet for customers who need to send their Model S' to the shop -- and can even borrow (or later buy) a better Model S or Tesla Roadster as loaner vehicles. 

Today's early repayment is a crucial point in the history of clean energy loans issued by the Obama administration. Even though DOE said today that losses in the loan program are at 2 percent of a $34 billion portfolio and less than 10 percent of the $10 billion loss reserve, it's hard to forget some of the large loan defaults made by now-bankrupt clean energy companies. 


Tesla/SpaceX CEO Elon Musk
 
In September 2011, Silicon Valley-based solar panel company Solyndra filed for bankruptcy after receiving a $535 million loan from the DOE in 2009. Government officials reportedly warned the administration of the viability of Solyndra, saying the company would go bankrupt in a matter of two years. The warnings were put aside in order to meet political deadlines.

Later in November 2011, Beacon Power, a company that creates flywheels to store power and increase grid efficiency by preventing blackouts, filed for bankruptcy after receiving a $43 million loan guarantee from the Department of Energy in August 2010.

But the failed energy loans didn't end there. Battery maker EnerDel's Ener1 subsidiary filed for bankruptcy in January 2012 after winning a $118.5 million grant from the DOE in August 2009. Ener1 was supposed to develop batteries for electric vehicles.

Just last month, it was announced that California-based Fisker Automotive -- which makes plug-in hybrid electric vehicles -- was talking bankruptcy. The automaker received $529 million in DOE loans in April 2010 for the development of high-tech vehicles. However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. 
 
Due to these frozen loans, Fisker is having a hard time securing funds to make its second car -- the Fisker Atlantic. Fisker is now looking for investors to help out financially, but the company's investor solution has drawn a lot of criticism because two potentials have been Chinese companies -- Zhejiang Geely Holding Group and Dongfeng Motor Group Co. This is seen as an issue because Fisker received U.S. taxpayer dollars to fund its Karma plug-in. 
 
Things have only gotten worse, as Fisker was forced to lay off 75 percent of its staff and even missed its DOE payment in late April. 

Thankfully, Tesla has had a better time with its clean auto production. The company can now look ahead to continued Model S success and production of its Model X crossover EV (which hoped to begin production this year, but was shelved to 2014 with deliveries expected in 2015).

Source: Tesla Motors



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Awaiting the usual comments
By DukeN on 5/23/2013 9:07:08 AM , Rating: 5
Still waiting for the "Ya, but my FR-S goes vroom vroom for less" and the "Obama ..grumble grumble..communist....tax&spend...government subsidized blah blah".




RE: Awaiting the usual comments
By ianweck on 5/23/13, Rating: 0
RE: Awaiting the usual comments
By TSS on 5/23/13, Rating: 0
RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:41:18 PM , Rating: 2
What is your definition of "well off"?

A typical college grad with a bachelor starts at 55-75k a year. In areas with lower salaries, they still start at about 50k. The really bad areas still pay you at least 45k.

If you can't afford a Models at ~$60k after a few years of employment then you are just bad at personal financial management.

If you put 20k down then your payment is ~650, 30k down and your payment is ~500. You will save ~$200 on fuel a month. You also get a $7500 tax credit. Seriously, if you can't afford this then it's your fault.

Don't give me the "not everyone can afford college" BS. Community college is free with Pell grants. Then transfer to a 4 year school. Pell grants and loans will cover 100% of costs or more unless you go to a private school.

If your parents make too much that you can't qualify for Pell grants then you still have scholarships. But I'm sure your parents won't mind paying for your CC tuition of 2-3k every 16 weeks.

Do people just want a high pay job without earning it? Then cry when they can't afford things any middle class can afford?


RE: Awaiting the usual comments
By PontiusP on 5/23/2013 2:21:28 PM , Rating: 2
You just posted a sensible comment encouraging personal responsibility. What?!?


RE: Awaiting the usual comments
By BRB29 on 5/23/2013 3:46:13 PM , Rating: 2
and got rated down because having common sense and personal responsibility is actually rare in this country.

Seriously, I grew up with nothing and my parents making minimum wage because they barely spoke english. All my siblings and I used scholarships, Pell grants and loans to get through school. I actually spent 7.5 years in the USMC and I'm getting my MBA and project management certification right now. It's not that it's so difficult, just hard work(grind). Some people are just allergic to hard work and dedication.

what's the next excuse? single parent? me too.


RE: Awaiting the usual comments
By OutOfTouch on 5/23/2013 7:01:15 PM , Rating: 3
I am glad that you got a pell grant but not all of us are that lucky. I decided to go back to school after my employers went out of business (twice) over the last few years. My wife and I made less than $40k a year combined during that time span and I barely qualified for subsidized loans, certainly not a pell grant. Unfortunately the pell grant system is another broken and abused system like food stamps. PS. Thanks for your service.


RE: Awaiting the usual comments
By BRB29 on 5/24/2013 8:26:32 AM , Rating: 2
Isn't Pell Grants for the unlucky ones? My parents combined made less than 20k for a family of 6. I'm happy this country gave everyone a chance to leave the ghetto.

I understand your position. It's hard when you're on the bottom and everything seems out of reach. In this country, anyone who wants an education will be able to get it. Keep pushing and don't give up.

I think the Pell grant and food stamps systems work just fine. The real problem is dishonest lazy people that wants to be a bum.


RE: Awaiting the usual comments
By M'n'M on 5/24/2013 12:10:36 AM , Rating: 2
I've tried to post a comment w/some references but alas the DT censor thinks my comment is SPAM and won't allow it. That, all in itself, is pretty funny given the actual SPAM posts you can see after every article.


RE: Awaiting the usual comments
By someguy123 on 5/23/2013 11:15:15 PM , Rating: 3
Pell grants aren't easy to obtain anymore even if you're in a low income bracket. Hell these days it's a struggle to get a full FSA loan without you and your family being broke (or lying). I find it ironic that you're posting about self responsibility while basing it on free-rides through your parents or government subsidies.

Being a college grad making 55k is "well off", and many people are well off regardless of not being able to buy that maserati. I don't see why being well off is seen a derogatory thing anyway. If you have a decent income then enjoy and don't get caught up in semantics.


RE: Awaiting the usual comments
By Ammohunt on 5/23/2013 1:47:04 PM , Rating: 3
Easier than that really:

Tesla: Win!

Fisker: Loss!
A123: Loss!
Solyndra: Loss!
Many Others i forget: Loss!

See why its a bad idea for the government to pick winners and losers? Because they suck at it!


RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:52:45 PM , Rating: 3
quote:
See why its a bad idea for the government to pick winners and losers? Because they suck at it!


They didn't pick winners or losers. You just demonstrated that they picked everyone willing to participate.

You also forgot GM


RE: Awaiting the usual comments
By Ammohunt on 5/23/2013 3:14:53 PM , Rating: 2
Just like welfare recipients.....


RE: Awaiting the usual comments
By BRB29 on 5/23/2013 4:20:04 PM , Rating: 2
Ummm...as much as I hate the welfare program, you're still wrong.


RE: Awaiting the usual comments
By Mint on 5/24/2013 8:34:14 AM , Rating: 3
More cherry picking and BS. The A123 loan will largely be paid back by new owners. Loans by Nissan and Ford will be paid back.

The DOE's ATVM loan program was a $25B. The losses are well under $1B. They helped Tesla get through $1B in losses before achieving profitability and becoming the $10B company it currently is.


RE: Awaiting the usual comments
By Schrag4 on 5/23/2013 12:09:18 PM , Rating: 2
Ok, I'll come in with a usual comment. How hard is it to pay off a $450MM federal loan when you're receiving $250MM per year in environmental credits from the state of CA? (wonder if there are any other credits?)

http://www.dailytech.com/Tesla+Could+Receive+250+M...


RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:21:33 PM , Rating: 3
It says up to 250M.

Do you know how environmental tax credit works?

Companies sell pollution credits to each other all the time.

I don't understand why people hate on a company that actually gives a crap about the air you breathe. If you've ever been to Cali then you will see that smog is a serious problems in some cities.

They used their money responsibly, paid off their loans, and make actual practical and useful vehicles. What is the hate here for?


RE: Awaiting the usual comments
By Solandri on 5/23/13, Rating: 0
RE: Awaiting the usual comments
By BRB29 on 5/23/2013 1:57:30 PM , Rating: 1
since pollution is based on what's harmful to humans. We're not protecting the environment. We're protecting our own species from extinction.

Trust me, humans cannot destroy the earth through pollution. We will be extinct well before that could ever happen. A giant asteroid hitting the earth instantly wiped out most species and blocking the sun for thousands of years did not do it.


RE: Awaiting the usual comments
By Solandri on 5/23/2013 7:31:14 PM , Rating: 2
See, there's your problem right there. You're operating under the premise that any pollution is worse than anything else that can happen, and therefore anything that reduces pollution is always a good thing to do.

It's not that simple. Something that reduces pollution by consuming resources (money in this case) can deprive you of resources which could be used on other ways to benefit mankind (or even reduce pollution in other ways). The net effect can then be an increase in the amount of pollution. That's the criticism people are raising about giving tax credits for EVs. If the pollution reduction from switching to an EV is worth less than $7500, then it's a bad program, period.

I'm not saying the tax credit program needs to end. I'm saying it needs to be justified as being a net benefit for mankind. Your stance that the mere fact that it reduces pollution is justification enough is an extremist view which gives 100% weighting to pollution reduction and 0% to everything else in the decision-making process.

What if we applied your anti-pollution standard to fertilizer runoff, and (hypothetically) it results in a reduction in the country's food-production capacity to where we can only feed 90% of the population. Are you still going to claim that the mere fact that it reduces pollution is enough to justify it as being a benefit for mankind, as 10% of the population starves to death?


RE: Awaiting the usual comments
By BRB29 on 5/24/2013 8:36:35 AM , Rating: 2
But we're talking about Tesla not the whole industry which most failed.

Tesla has shown it has the right technology. It has a good leader, intentions, and an attainable plan. It has shown it is responsible with its funding and resources.

At 60k, people who planned to buy would've bought it anyways with or without the tax credit.

Tesla also did not lobby for a 0 emission law. The massive emissions regulations has been a California thing for a long time. There are plenty of cars that are legal to sell in the rest of the US but not in Cali. Manufacturers have special emissions options for Cali cars. When you build a vehicle online, you will see an option for Cali emission option in some vehicle.

And you're going off the deep end exaggerating and going off on a tangent about food production. It's clear the industry is moving towards EV as mainstream. When it does, you can thank Tesla for it just like we can thank Ford for cheap mass produced vehicles.


RE: Awaiting the usual comments
By Mint on 5/24/2013 1:12:50 PM , Rating: 2
quote:
At 60k, people who planned to buy would've bought it anyways with or without the tax credit.
This is a silly argument. If that was the case, they would charge $7k more and earn $150M+ more on the cars they're selling this year. People who buy $60k+ Mercedes are well off, so why don't they also jack up the price another $7k? They'd buy it anyway according to you, right?

The fact is that price does matter, even for people buying that class of car.


RE: Awaiting the usual comments
By BRB29 on 5/24/2013 1:24:32 PM , Rating: 2
That is not a valid argument. A 60k car is 60k. The 7.5k tax credit is a bonus. People who buys this can afford more than that but they're buying it to be green. It has more of respect and support for Tesla than the actual vehicle. So losing 7.5k in tax credit is not as big a deal as paying 7.5k extra in vehicle price.


RE: Awaiting the usual comments
By Mint on 5/26/2013 8:51:36 AM , Rating: 2
quote:
So losing 7.5k in tax credit is not as big a deal as paying 7.5k extra in vehicle price.
That's ridiculous. People who earn that much aren't idiots who get duped by sticker price.

$7.5k in tax credit is exactly the same to them as saving $7.5k in vehicle price (aside from the year of occupying those funds, which is pretty meaningless for today's rates of return).

If there was no credit, Tesla would have to sell a $60k car for $53k to keep the same sales. Otherwise, sales will drop by about the same amount that BMW/Mercedes/Audi/Jaguar/etc would see their sales drop with a $7k price hike, which is obviously substantial or else they would be doing it.

People want to be green, but they've proven time and time again that they won't pay much for it. It's essential for the Model S to be competitively priced - and yes, that includes the tax credit - for it to be selling as well as it does. Otherwise, they will lose a significant number of sales to people that just say "f*** it, I'll get a better Merc for less".


RE: Awaiting the usual comments
By BRB29 on 5/29/2013 9:16:45 AM , Rating: 2
People who buys this wants to help the environment and EV industry. Helping does not mean stuffing someone's pocket. We don't like greedy people. That's why an increase in vehicle price is a big deal but a loss of tax credit is not. Even thought they're both money. It's the principle here.


RE: Awaiting the usual comments
By Solandri on 5/25/2013 3:13:12 PM , Rating: 2
quote:
But we're talking about Tesla not the whole industry which most failed.

Perhaps that's why we're disagreeing. I'm not talking about Tesla or even the industry as a whole. I'm talking about how we decide which programs are worthy and which are not.

quote:
Tesla also did not lobby for a 0 emission law. The massive emissions regulations has been a California thing for a long time.

Are you old enough to remember the first time California had a zero emissions law? It was what led GM to develop the EV-1. Then just when the law was about to kick in and GM was to reap the rewards of having the only viable EV which met the requirements, California pulled the rug out from under them and decided cars didn't need to be zero emissions, that hybrids were good enough.

That's the situation I'm saying we should try to avoid repeating. If California's first zero emissions law had been well-reasoned, they wouldn't have repealed it. But because it wasn't founded on fundamentally sound reasoning, and instead was based merely on the idea that zero emissions sounded like a good idea, it was easy for the politicians to renege and repeal the requirement. Unfortunately only after GM had invested billions of dollars of R&D into the technology, thus depriving them of any chance to recoup their investment.

quote:
And you're going off the deep end exaggerating and going off on a tangent about food production.

It is not an exaggeration nor a tangent. You are insisting that merely reducing pollution is justification enough. I provided a hypothetical example showing why it's not because of opportunity costs. One cannot blithely ignore opportunity costs to give programs a free pass just because they happen to coincide with one's values. They still need to be justified in an impartial and self-consistent manner, held to the same standard as you'd apply to a program you vehemently oppose.

quote:
It's clear the industry is moving towards EV as mainstream. When it does, you can thank Tesla for it just like we can thank Ford for cheap mass produced vehicles.

Why in the world do you think I'm against EVs? Just because I criticize how people like you justify the program, you assume I'm against it? I'm not criticizing the technology, and in fact I really hope they're able to overcome some severe engineering challenges and succeed.

What I'm saying isn't about technology. It's about how we make decisions. Decisions have to be judged and criticized in a consistent manner - that means all ideas and programs have to be vetted the same way. No going easy on ideas one favors. In fact I try to be most critical of the ideas I favor, just in case my biases are causing me to unknowingly go easy on.


RE: Awaiting the usual comments
By Schrag4 on 5/24/2013 12:44:26 PM , Rating: 2
quote:
since pollution is based on what's harmful to humans. We're not protecting the environment. We're protecting our own species from extinction.


The problem is that some things the EPA classifies as pollutants are harmful to humans, and others are not.


:)
By flyingpants1 on 5/22/2013 10:34:52 PM , Rating: 5
Great job Tesla, you did it.

EVs will soon be cheaper to own and drive than gas cars. The $30k 200-mile EV will change the world in a few years.




RE: :)
By MechanicalTechie on 5/22/13, Rating: -1
RE: :)
By Mint on 5/23/2013 12:24:52 AM , Rating: 5
Please stop with the misinformation. It's really not hard to google 'tesla rare earth'.

Lithium ion batteries generally don't use rare earth metals, and the Li(Ni-MN-Co)O2 chemistry from Panasonic that Tesla uses doesn't either. The old NiMH battery chemistry does. Tesla also uses induction motors, which don't have any permanent magnets in them.

A Model S barely uses any rare earth metals.


RE: :)
By Mint on 5/23/2013 4:34:19 PM , Rating: 2
(Correction: Tesla uses Li(Ni-Co-Al)O2 batteries. Still no rare earths, though.)


RE: :)
By Mint on 5/23/2013 12:43:59 AM , Rating: 2
It'll be more than a 'few' years for that. EVs with range extenders are the only hope for that.

But even covering the luxury sport (Model S) and luxury SUV (Model X) segments are major accomplishments. You don't exactly find the most fuel efficient vehicles among the M5's and CLS's of the world.

Let's see if TSLA shares can stay at $90. They'll have to sell about 50-100k vehicles a year with $5-10k net profit to justify that. It's already worth almost 1/4 as much as GM.


RE: :)
By flyingpants1 on 5/23/2013 5:23:41 AM , Rating: 2
Based on what? Elon says the cheaper mass market car is the first priority after S and X, scheduled for 2016/17


RE: :)
By Mint on 5/23/2013 7:04:00 AM , Rating: 2
I just don't see that future model actually being $30k, nor do I see it having 200 mile range.

Right now the 60kWh Model S barely clears 200 miles in EPA tests. That's a lot of batteries, and given how the Model S was priced before axing the 40kWh model (about $10k for every 20kWh), I don't see how the battery on a 200 mile EV would cost less than $20k in 2016. The rest of the car isn't free, and Tesla needs to make money as well.


RE: :)
By BRB29 on 5/23/2013 7:48:57 AM , Rating: 2
Because as battery storage density increases, which it is rapidly, we are going to see lighter batteries. That also mean smaller and cheaper batteries.

Less weight = less energy used = more range

With lighter and smaller batteries, they can also make a smaller car and a cheaper model.

smaller/Lighter car + lighter batteries = less costs + more range

To reduce costs more, they can use even less batteries to achieve the same 200miles range and take out some features.

You are right about 30k price, it is unlikely. I can see Tesla making a $~35k 200-250 mile range EV. I'm sure they'll market as 30k because of tax rebates.


RE: :)
By karimtemple on 5/23/2013 8:24:05 AM , Rating: 2
And I will be quite likely to buy one.


RE: :)
By Mint on 5/23/2013 4:06:49 PM , Rating: 2
If it has a 200 mile range, I'm thinking $35-40k after the tax credit.

It'll be a well equipped, decently performing car, like a BMW 328i. $35k is a reasonable price for a car like that.


RE: :)
By BaronMatrix on 5/23/13, Rating: 0
RE: :)
By flyingpants1 on 5/24/2013 12:56:42 PM , Rating: 2
Okay. Why?


RE: :)
By tayb on 5/23/2013 11:27:19 AM , Rating: 2
Battery development is beyond rapid right now. In 4-5 years I have no doubt that the cost and weight per kwH will have halved. If this holds true there will be many EV options in the $20k-$30k market with 200+ range.


RE: :)
By Mint on 5/23/2013 4:32:10 PM , Rating: 2
I guess time will tell, but I think you're overly optimistic.

Double density batteries have a much more lucrative market right now with smartphones. Apple and Samsung would easily pay $2 per Wh for such a battery (5x current prices), even if it only had half the cycle life needed for automotive applications. Yet it doesn't exist.

The startup that figures out how to increase density is certainly going to tap that market first. Only when such technologies becomes widespread knowledge will higher density have a chance at lowering costs.

Raw materials aren't really the limiting factor in battery costs anyway. With current energy densities, even a cheap $300/kWh works out to $60+/kg, which is many times more expensive than lithium, cobalt, carbon, etc.


RE: :)
By BRB29 on 5/23/2013 4:41:51 PM , Rating: 1
I don't think he's overly optimistic. The reality is money is the driving force behind this tech right now. That's a very strong incentive for most people.


RE: :)
By inperfectdarkness on 5/23/13, Rating: -1
RE: :)
By LRonaldHubbs on 5/23/2013 8:45:15 AM , Rating: 5
Since you're apparently too lazy to look this up yourself...

quote:
Tesla got a $465 million loan from the DOE in 2010 as part of an Advanced Technology Vehicle Manufacturing program. The company, which has made some previous payments, had nine more years to pay off the loan.

quote:
Tesla Motors, just cut the government a $451.8 million check, which means that Tesla has paid off its entire Department of Energy loan plus interest.

http://www.businessweek.com/articles/2013-05-22/te...

quote:
Interest rates on the loans range from 0.9 percent to 3.4 percent, according to the filing. The loans must be fully repaid in 10 years, Ahuja said.

http://www.bloomberg.com/news/2012-05-11/tesla-to-...

Why should the interest have been 50M? Do you have some sort of justification for this number? The rate they were given is in line with typical interest rates you would get from any other lender.


RE: :)
By inperfectdarkness on 5/23/13, Rating: 0
RE: :)
By BRB29 on 5/23/2013 3:16:32 PM , Rating: 2
They're not going to. People have confidence that Tesla will be successful. They can just issue more stocks and it will sell out on the first day.


RE: :)
By SPOOFE on 5/24/2013 5:12:01 AM , Rating: 2
Why is it Tesla's fault if some other entity is handing out loans, and why wouldn't they take advantage of such a useful option seeing as how it was freely offered to them?


so what?
By NeoReaper on 5/23/13, Rating: 0
RE: so what?
By rountad on 5/23/2013 12:03:31 PM , Rating: 3
You aren't considering the positive marketing aspects of paying off this loan. There is a lot of goodwill to be gained by doing this.
It makes them look successful, too. People are more confident in buying a car from a successful company.
The timing of the offering is good, too, considering Tesla's recent stock run, driven in large part by their new-found profitability.


RE: so what?
By NeoReaper on 5/23/2013 12:16:55 PM , Rating: 2
i guess this is true but at the same time, i was under the impression they were moving more cars than they can make anyway. did they really need the good will and the increased consumer confidence at this exact moment in time? i guess i just disagree with the timing.


RE: so what?
By BRB29 on 5/23/2013 2:02:56 PM , Rating: 2
and they didn't run pay their boards and CEO huge bonuses with lavish parties. Instead, they paid off loans early. This is a very big deal because I don't know of too many large corporations that wouldn't abuse this.


RE: so what?
By NeoReaper on 5/23/2013 3:05:26 PM , Rating: 2
im not actually sure how much executives are being paid at Tesla so i cant really comment on specifics but do you realize the size parity of Tesla and any other auto manufacturer? do you feel that all executives from a particular industry should be paid the same amount, no matter its size and/or success (aka profit)?


RE: so what?
By BRB29 on 5/23/2013 3:23:21 PM , Rating: 2
Executives salary are usually not the incentives. They are given an amount of shares of the company as package with their job offer. If they make the company successful, then the share price increases and thus they make more money. Most of the time, the CEO's salary is less than a rounding error compared to his incentives package.

I'm sure Elon's pay won't increase but he would just get more shares as a bonus at the annual performance review by the board. It's the industry's way to pay CEO based on his performance.


RE: so what?
By NeoReaper on 5/23/2013 3:34:16 PM , Rating: 2
i agree with you on how an executive is typically compensated for the success of the company but then why did you say "and they didn't run pay their boards and CEO huge bonuses with lavish parties"? first you say large companies would abuse and spend the money and now ur saying they dont... ur statements contradict each other.


RE: so what?
By BRB29 on 5/23/2013 3:38:23 PM , Rating: 2
Sorry, that was my bad. I did not delete a previous sentence completely. I would've corrected it if there was an edit option.


RE: so what?
By NeoReaper on 5/23/2013 3:46:39 PM , Rating: 2
ah ha, gotcha. overall, Tesla is an interesting company but i reserve many doubts on its long term success. with all lux car manufacturers moving to hybrid/electric powertrains options, i dont think Tesla will be able to effectively compete. they appear to be doing well right now only because competition hasnt arrived yet... thats the main reason why i feel very iffy that they would rather spend their new found money on repaying a loan early rather than furthering their R&D.


RE: so what?
By BRB29 on 5/23/2013 4:31:53 PM , Rating: 3
Tesla is aiming for the economy vehicle market. They used the top down approach to get there. They had to because they had to develop the technology and find early adopters with deep pockets to pay for it.

It's clear that hybrid is a stop gap measure to oil problems. They will go away.

There's only 3 things holding EVs back right now
1. Infrastructure
2. Cost
3. Practicality

Tesla's future is actually better than automakers like GM. It's obvious by now that EV will be mainstream well within our lifetime. They are the undisputed leader in EV technology. They are the only manufacturer that is capable of producing mass quantities. So far, they have the only practical EV that is affordable. I don't consider the leaf or spark a practical car for obvious reasons.

After paying back the loan, they actually still have plenty of cash in the bank. I'm sure most of that will go to R&D and building new facilities. It's obvious that Elon's primary objective is growth right and infrastructure development right now. Paying back the loan was to boost investor confidence so he can get more money from selling stock rather than loans and incur interest expense + increase liability.


RE: so what?
By NeoReaper on 5/23/2013 5:07:25 PM , Rating: 2
i reserve doubts that Tesla can reach the economy vehicle market ($20-25k/typical Camry) price any time in the near future because they have another major hurdle to jump. i understand that the approach is top down which seems far more effective than Nissan and GM's bottom up approach. The hurdle Tesla must overcome will likely be a battle with vehicles in the entry level luxury market ($30-40k) and that thats a battle i dont believe they can win. im also extremely hesitant about your statement that "It's obvious by now that EV will be mainstream well within our lifetime". ppl said hybrids would be mainstream too but honestly, today, its still just a niche.


RE: so what?
By BRB29 on 5/24/2013 8:46:18 AM , Rating: 2
The average vehicle price is 30k. They only need to hit $35k to be mainstream. We will get to $35k average vehicle price in just a few years.

Hybrids were never meant to be mainstream. People say that but the industry used it as a stop gap between ICE and EV/hydrogen vehicle. Even when you look at all the automakers, there's only 3 that are doing serious work for hybrids. Most automakers are doing enough to say "me too" because they know it's not worth the investment. I give hybrids 10-20 years before they completely disappear from production. In 20 years, EV will be mainstream primarily because the infrastructure will be in place.


RE: so what?
By NeoReaper on 5/24/2013 11:21:27 AM , Rating: 2
call it semantics if you'd like but youre previous statement was in regards to economy vehicles. im well aware that the average price of a vehicle is up to $30k since that number is dragged up by luxury cars, sports cars, and large trucks. the argument was about a mainstream car.

you like making very bold statements like "EV willl be mainstream soon" and "hybrids were never meant to be mainstream". hindsight is 20/20, obviously you would say this now since hybrids have essentially failed and i would disagree with you on ur statement in regards to "only 3 that are doing serious work for hybrids". honestly, only 1 company has tried and thats Toyota. and now you only have 1 company trying to really push EV which is Tesla.

in 20 years from now when the next hyped up successor is around, you can make this same argument again that EVs were only a stop gap. they never were meant to be mainstream. after all, only 1 company actually tried, everyone else said "me too".


RE: so what?
By BRB29 on 5/24/2013 12:13:41 PM , Rating: 2
quote:
call it semantics if you'd like but youre previous statement was in regards to economy vehicles. im well aware that the average price of a vehicle is up to $30k since that number is dragged up by luxury cars, sports cars, and large trucks. the argument was about a mainstream car.


Yes but the vast majority of vehicles sold are not luxury. The mainstream sedans that sells high volume are Toyota camry, Honda Accord, Nissan altima, etc... They actually outsell the economy cars like corolla by a large margin.
These mid size sedans usually start around low 20s. With just some common options, it is up to 25k+. I recently wanted to buy a 4 door accord with basic options and nothing fancy. It was over $27k. Went to Toyota and got about the same price. Chevy, Ford, Nissan was just a little lower at around $25k.

So yea in 5-10 years, if Tesla releases a $35k EV that can do 200-300 range with the same practicality as a regular sedan then it will sell like hot cakes.

Regarding hybrids not being mainstream, I found that out by doing research because I care where my money goes. I buy all stocks by myself instead of throwing it in a mutual fund. But you don't need anyone to tell you that. Government funding tells you that in clear daylight. Reinventing our transportation requires an entirely new infrastructure. Something that the private sector cannot do alone right now.


RE: so what?
By flyingpants1 on 5/24/2013 1:00:29 PM , Rating: 2
He has thrown out a figure of $20k before, let's hope for the best.


RE: so what?
By flyingpants1 on 5/24/2013 1:02:56 PM , Rating: 2
Agreed, there is really no reason to pay back the loan that quickly.


Smart Company Making Smart Moves
By klstay on 5/23/2013 9:39:18 AM , Rating: 2
A) They went after the right segment (luxury performance) at the right time because today going after the market the Volt pursued gets you another failure. SMART.

B) They took advantage of good loan rates available from a government willing to cut them rates no private investor was going to provide. Say what you will of the politics, that was what was offered to them so they took advantage of it. SMART.

C) Now they get to talk about the 'next gen' stuff being more efficient and getting into the mainstream basic transportation segment etc. all they want, but they do not really have to deliver anything there for a LONG time if ever. Honestly, the could promise free spaceships for all in 10 years if they felt like it - talk is free for the time being so why not talk big? SMART.

Personally, I like seeing smart people running a smart company getting ahead. At the same time anyone who honestly believes Joe Public cars are coming out of this anytime at all soon needs to re-examine the weed they are smoking.




RE: Smart Company Making Smart Moves
By tanjali on 5/23/2013 9:57:52 AM , Rating: 3
Smart making luxury cars? That was their only choice for company starting from scratch. They don’t have real profit of selling model S, X, they are positive Zero with those. Real profit are cars for middle class. If they don’t start making those soon, why even starting this business. Real question about the Loans is why the banks didn’t provide the loan in the first place?


RE: Smart Company Making Smart Moves
By ianweck on 5/23/2013 11:12:25 AM , Rating: 1
quote:
Real question about the Loans is why the banks didn’t provide the loan in the first place?


Simple. When banks lose money investors get pissed. When the government loses money, we just give them more.


By tanjali on 5/23/2013 2:21:38 PM , Rating: 3
That's right if you forget bailout.


By Florinator on 5/23/2013 3:46:37 PM , Rating: 2
quote:
Real question about the Loans is why the banks didn’t provide the loan in the first place?


But they do... all the time. All the other companies that fail and we never hear of, just because the government was not involved. In Silicon Valley, out of 10 startups, 1 succeeds and 9 fail. And the investors (banks, VC's) lose their money. Big f*cking deal, that's how capitalism works. Sequoia Capital (one of the biggest VC's in the area) lost a lot of money on many startups, but every now and then comes a YouTube, where they made their investment 40 fold...

Do I support government handouts? No, but it is what it is. Like someone wrote above, we spend $75 billion on food stamps, I'd rather spend it on creating jobs, because the ripple effect for the economy is superior to that of food stamps.


You're welcome
By PontiusP on 5/23/2013 2:15:43 PM , Rating: 4
"and particularly the American taxpayer from whom these funds originate,"

One of the very, very, very few times in my life I've ever seen a taxpayer actually thanked for anything.

Most of the time, the belligerent, entitled thugs spending the money act like we owe it to them.

Kudos to Musk for being humble.




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What?
By RjBass on 5/23/13, Rating: -1
RE: What?
By RjBass on 5/23/13, Rating: -1
RE: What?
By BRB29 on 5/23/2013 3:35:35 PM , Rating: 3
If you've actually read and understood the books, you would be saying something completely different.

Any income is directly contributed to GDP. Even unemployment insurance.

Federal income tax contributes the federal budget. When the government spends the federal budget, it directly contributes to GDP. Roughly 35% of our GDP is from government spending.

The money supply is controlled by the Federal Reserve. The Federal Reserve is hardly federal despite its name. Printing cash does not increase money supply. Lowering the reserve ratio, decreasing prime rate, discount rates are ways to increase money supply.

It's obvious that you don't understand Macroeconomics. Either you read some bogus books or you didn't understand it.


RE: What?
By RjBass on 5/23/13, Rating: 0
RE: What?
By BRB29 on 5/23/2013 4:34:52 PM , Rating: 2
http://nationalpriorities.org/budget-basics/federa...

At this point, I have no clue if you're just trolling or extremely stupid.


RE: What?
By SuperFly03 on 5/24/2013 7:16:54 AM , Rating: 2
The latter... Anyone can publish a book just like anything can be put on the internet. Saying it does not make it true.

Move on, you're wasting your time with him.


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