PALO ALTO, Calif. (Manufacturing.net) — Tesla Motors, the California-based electric vehicle manufacturer, has announced that it has paid off its 2010 loan from the Department of Energy (DOE) in full as of today. The payment of $451.8 million repays the full loan with interest. The company claims it is the only American automaker to have fully repaid the government of its loans, although that statement has been a matter of contention with Sergio Marchionne, the head of Fiat, the parent company of Chrysler.
Tesla Motors was awarded the loan in 2010 from the Advanced Technology Vehicle Manufacturing (ATVM) program within the DOE. As part of the deal, Tesla was required to acquire matching private capital obtained via a public offering of stock. But before ever receiving the loan, the company had brought its Roadster sports car to market and designed electric powertrains for Mercedes vehicles.
Elon Musk, the company’s cofounder and CEO, himself purchased $100 million of common equity in the company in addition to almost $1 billion in funds raised in last week’s offerings of common stock and convertible senior notes.
In a statement, Musk said: “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. I hope we did you proud.”
Although Tesla had emphasized the fact it is the only automaker to have fully repaid its government, the Advanced Technology Vehicle Manufacturing program has no connection to the bailouts received by General Motors and Chrysler. The ATVM program was signed into law in 2008 by President Bush and awarded by the Obama administration, and was given only to companies in good financial health.
When it comes to the matter of having repaid government loans when others could not, Musk is perhaps skirting by on a technicality. It is true that with the most recent wire, his company has completely repaid its obligation to the DOE. Chrysler's Marchionne was quick to respond by saying that Chrysler did also repay a $5.9 billion loan in 2011, a full six years ahead of schedule, although this does not account for the $1.3 billion loss that the U.S. government incurred upon selling its stock back to Chrysler. General Motors is currently in a similar situation, having paid off its loan obligation but with the Treasury Department shedding stock at a loss. Musk did not provide more detailed evidence to back up his claim.