Tesla Motors just announced that it has repaid the entire $465 million loan that it received from the Department of Energy a full nine years early. The development makes Tesla the only US car company in history to have fully repaid loans received from the government.
Tesla’s announcement is good news for both the automaker and the Department of Energy. The DOE has come under scrutiny for the loans that it gave to Fisker Automotive, but even with Fisker’s problems the DOE is proud of Tesla’s outcome. For the first seven years since its founding in 2003, Tesla was funded entirely with private money, led by Elon Musk. Tesla brought its Roadster sports car to market with a 30% gross margin, designed electric powertrains for Daimler 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.
Tesla’s final loan payment was made using a portion of the approximately $1 billion in funds raised in last week’s concurrent offerings of common stock and convertible senior notes. “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.”