Tesla Repays $465 Million DOE Loan 9 Years Early
May 22, 2013 10:20 PM
comment(s) - last by
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
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 i
ssue 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
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).
This article is over a month old, voting and posting comments is disabled
5/23/2013 4:15:05 PM
How do income taxes contribute to the Federal Budget? Show me. Because the classes I am taking now, the books I am reading now, the proper education about the US monetary system now say something completely different.
Our GDP is measured by many things, but income taxes play no part of that, other then to keep our (the US citizens) spending controlled in an effort to keep inflation down.
The problem here is that to many people are getting their economic and monetary policy information from people who have no idea how it really works.
5/23/2013 4:34:52 PM
At this point, I have no clue if you're just trolling or extremely stupid.
5/24/2013 7:16:54 AM
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.
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
Tesla Reports First Profitable Quarter; Hires Aston Martin's Chief Vehicle Engineer
May 8, 2013, 8:07 PM
Tesla Reveals Generous Model S "Hassle Free" Battery Replacement, Service Programs
April 29, 2013, 12:26 PM
Fisker Automotive Expected to File Chapter 11 Bankruptcy This Week
April 10, 2013, 8:52 AM
House Committee Looks into Terms of DOE's Fisker Automotive Loans
October 23, 2012, 2:50 PM
Mitt Romney Aims to Axe Green Energy Loans to Private Businesses
June 6, 2012, 3:15 PM
Quick Note: Kia Soul EV Priced from $33,700
September 11, 2014, 5:32 PM
Production Infiniti LE Electric Sedan Leaked in Patent Drawings
September 9, 2014, 10:32 AM
"Decepticon" Driver Triumphs Over Cops in Massachusetts Court
September 5, 2014, 12:07 PM
Tesla Motors Confirms Nevada Gigafactory Deal, Will Receive $1.25B in Tax Breaks
September 4, 2014, 8:24 PM
Mazda Unveils the 2016 MX-5 Miata, Drops 220 Pounds and 3" in Length
September 3, 2014, 8:59 PM
Report: Tesla Has Selected Nevada for Its Massive Gigafactory Complex
September 3, 2014, 8:07 PM
Most Popular Articles
Dell Announces "World's Thinnest" Tablet: The Venue 8 7000 Series
September 11, 2014, 8:51 AM
Quick Note: Buy an Xbox One Sept 7-13, Get a Free Game
September 4, 2014, 10:42 AM
Apple Announces Its Smartwatch: The $349 Apple Watch
September 9, 2014, 2:09 PM
T-Mobile Launches Un-carrier 7.0, Beefs Up Wi-Fi Calling
September 11, 2014, 2:56 PM
Russian Hackers Compile List of 10+ Million Stolen Gmail, Yandex, Mailru
September 11, 2014, 11:41 AM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information