DailyTech - Tesla's Elon Musk Vows to Pay Off $465M Government Loan Within Five Years

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Auto Tesla's Elon Musk Vows to Pay Off $465M Government Loan Within Five Years
Shane McGlaun (Blog) - February 28, 2013 8:53 AM

68 comment(s) - last by jack daniels e.. on Mar 2 at 2:25 PM

Musk only needs half the time given to pay loan

Electric vehicle maker Tesla received a loan from the U.S. Department of Energy to the tune of $465 million. The automaker has until the end of the decade pay off the loan, but CEO Elon Musk believes that Tesla will be able to pay off the entire loan in half the time.

The loan was granted to Tesla under the Advanced Technology Vehicles Manufacturing loan program and allowed the automaker to retool an automotive manufacturing plant in California. Tesla uses that plant to produce the Model S electric vehicle, and has recently stated that it will be able to produce 20,000 of the sedans during 2013.

^{President Obama and Elon Musk}

Despite seeing a significant increase in revenue, the automaker lost nearly $90 million during the last quarter and lost approximately $400 million during all of 2012. This news sent Tesla shares downward last week.

Musk also got personally involved in a dustup with the New York Times over what he saw as an unfair and dishonest review of the Model S. According to Musk, the bad publicity cost the company $100 million.

Source: Technology Review

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RE: Great photo

By Mint on 2/28/2013 8:10:29 PM , Rating: 2

quote:
Building something when demand is low or nonexistent, just for the sake of it, is crazy.

DING DING DING! Reclaimer FINALLY realizes that the reason businesses aren't hiring is because there is nothing to produce! By your own observation, supply sider policies only help crazy companies.

So now let me help you put two and two together:

- Lower taxes for the rich isn't going to help demand, especially when the wealthy will take the exact same amount out of the private market to buy the extra treasuries needed to pay for the loss of tax revenue.

- Lower taxes on businesses isn't going to give them demand.

- Less redistribution/entitlements is going to LOWER their demand.

- A cheaper and more desperate labor force from a smaller safety net isn't going to create demand

- Cutting the contracts that the gov't gives to businesses isn't going to create demand

Do you get it yet? All the tea party policies make the economy WORSE. None of them address the core problem of demand.

quote:
Even in a great economy, Tesla's market is TINY!

Guess what: The gov't loan to Tesla is correspondingly TINY! The EV subsidy as a percent of the auto industry size is TINY!

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RE: Great photo

By RufusM on 3/1/2013 10:53:34 AM , Rating: 2

Reclaimer is stating there is extremely soft demand for EVs, not aggregate demand. Guess what would happen if everyone bought EVs: The demand for electricity would be so high the infrastructure couldn't keep up. It takes years of red-tape to build new electric plants. Plus it's not popular to want coal, natural gas or nuclear, which are the most abundant and inexpensive options for electricity, so the price of it would be high for everyone, not just those with EVs.

To your point on handouts/entitlements:
Expanding handout/entitlements money only increases artificial demand in the very short term. As soon as those payments stop, the short term demand does too so they can NEVER be stopped or reduced once allocated. As I said before, it's easy to create dependency but much harder to stop it. Just ask any addict. Just look at the Cash for Clunkers program. As soon as the money went away, the artificial demand it generated went away too. It creates a mini-boom then crash after.

I understand your point about investing in in new technology for the future. That's the very thing that grows the economy in a long term manner, but the US Government doesn't have a crystal ball. Investors and banks are FAR better equipped to provide capital based on their experience of risk assessment. If they determine it's high-risk, why should the government risk it? Especially the US Government when they are already on the verge of bankruptcy. The US Government is constantly expanding, taxing more money to feed its growth. It's not an efficient entity because it has no competition. If it continues, everyone will eventually be working for the government and we'll have communism or a similar facsimile of it.

The thing is, money will always be spent on something: Money is a bank is loaned and spent, money in someone's pocket is spent on their needs/wants, etc. The key is finding where the money is best spent to provide the biggest boost to the economy. Money will naturally flow to the best investments to grow the economy in a long-term manner (in an economy with reasonable regulation and market forces), not just a short term artificially-stimulating demand manner.

Artificially stimulating demand and re-distributing wealth is much less effective, in the long term, than its natural distribution through regulation and market forces. With proper regulations and healthy competition everyone wins.

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RE: Great photo

By Reclaimer77 on 3/1/2013 2:29:44 PM , Rating: 2

Well put but he'll just say you're living in the past too. Money grows from trees and debt doesn't matter. In fact it's good.

His analogy about the man bailing out this sinking boat is very disturbing. He actually believes it's the government keeping us afloat instead of pulling us down.

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RE: Great photo

By Pirks on 3/1/2013 4:34:58 PM , Rating: 2

quote:
it's the government keeping us afloat instead of pulling us down

Shhh no one please tell this redneck about 1929 and how nicely government "involvement" kept this country "afloat", or his tiny fox news fed brain will pop

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RE: Great photo

By RufusM on 3/1/2013 5:26:43 PM , Rating: 2

I agree that more government regulation was needed in 1929. The 1933 Banking Act was needed for monetary stability. We need to go back to having separate Commercial and Investment banks.

Like I said, it's a balance of regulation and natural market forces. We don't want too much government regulation/taxation stifling the economy or natural supply and demand forces, nor do we want too little regulation/taxation where companies can do whatever they want and not pay their share in.

We've seen what happens in both cases and it's not pretty.

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