Another giant feather in Elon Musk’s cap: Tesla Motors repays the the entire loan given to them to kick start the business by the Department of Energy in 2010 a whole nine years early. One might say that it is more of a publicity move to show off how good things are going on at Tesla – otherwise who in their right mind would take that kind of money out of business so unnecessarily – but that doesn’t make it any less significant.
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. Mr. Musk commented: “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,”
Launched in 2003 using private funds of the investor, mainly Elon Musk who was looking for a new and innovative way to blew up all his PayPal money, Tesla first launched the Roadster sports car which, great though it was, didn’t quite cut the mustard as a profitable product.
But then the Roadster was more of an experiment for Tesla. After that they went on to make electric powertrain for giant car makers like Daimler, and designed and developed heir very own Model S, which turned out to be a huge success.
To support Tesla’s efforts in making green electric cars, the DOE then awarded the company with a sizable loan as part of the Advanced Technology Vehicle Manufacturing program. This is not the same program initiated by the Bush administration to save GM and Chrysler from bankruptcy. What Tesla got was a boost to take things to the next level. They were never in bad financial health, even when they were losing money in lumps.