Tesla Motors announced Wednesday that it has paid off a $465 million U.S. Department of Energy loan in full with interest. In doing so, Tesla becomes the first U.S. automaker to completely repay loans distributed under the DOE's Advanced Technology Vehicle Manufacturing Program. The ATVM loan program, which targets U.S. manufacturers of high efficiency vehicles, has come under heavy scrutiny as some recipients of the loans have struggled to find success, such as plug-in automaker Fisker Automotive. The loans are unrelated to the 2009 automotive "bailout," which occurred under the Troubled Asset Relief Program, commonly known as TARP.
Tesla was able to pay off its loan some 9 years ahead of schedule with capital raised during a recent common stock and convertible senior note offering. Tesla's stock price soared to an all-time high of $97.12 per share earlier this month, propelled by the success of its all-electric Model S luxury sports sedan.
Tesla cofounder and CEO Elon Musk thanked Congress and the American taxpayer in a prepared statement. "I hope we did you proud," said Musk.
Tesla was able to pay off its loan some 9 years ahead of schedule with capital raised during a recent common stock and convertible senior note offering. Tesla's stock price soared to an all-time high of $97.12 per share earlier this month, propelled by the success of its all-electric Model S luxury sports sedan.
Tesla cofounder and CEO Elon Musk thanked Congress and the American taxpayer in a prepared statement. "I hope we did you proud," said Musk.
Tesla Repays Department of Energy Loan Nine Years Early
Only American Car Company to Have Paid Back Government
Palo Alto, CA – May 22, 2013 - 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."
Only American Car Company to Have Paid Back Government
Palo Alto, CA – May 22, 2013 - 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."
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