Former `Loser’ Automaker Tesla Repays $465 Million Loan Ahead of Schedule; Revenge Is Sweet

You can mark Tesla’s $465 million loan paid. In full. Ahead of time.

Tesla Motors, one of the fastest-growing electric car companies, paid off its $465 million Energy Department loan ahead of schedule. Tesla is the only U.S. car company to repay its debt to U.S. taxpayers. The company founded by the billionaire mogul and rocket-ship enthusiast who co-founded PayPal Elon Musk. Musk borrowed $465 million from the U.S. Department of Energy. Yesterday, the company wired $451.8 million to the feds, completing its loan repayment nine years ahead of schedule.

Paying off the loan marks a major victory for the electric car company, which Mitt Romney labeled a “loser” during his unsuccessful 2012 Republican presidential campaign.
Tesla Motor’ loan was part a $25 billion fund designed to get fuel-efficient vehicles to consumers faster. The loan was authorized by Congress called the 2010 Advanced Technology Vehicle Manufacturing Program. The program was signed by President George W. Bush, and the money was awarded under President Obama. The loan program was separate from the Troubled Asset Relief Program (TARP) U.S. auto bailouts to GM and Chrysler.

In a statement, U.S. Energy Secretary Ernest Moniz said “Today’s repayment is the latest indication that the Energy Department’s portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated. Today, Tesla employs more than 3,000 American workers and is living proof of the power of American innovation.”

Tesla Motors used only a part of the $1 billion it raised last week in a stock and debt offering to make its final payment.

Elon Musk said in a statement “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.”

 Tesla was founded in 2003 and funded entirely with private funds. The company struggled because building an automaker from scratch is capital-intensive. Tesla lost $89.9 million in the first quarter of 2012. But the slide stopped after Tesla brought out the affordable Model S vehicle and the company reported its first profitable quarter. Consumer Reports gave the Model S a near-perfect rating of 99 out of 100 points. The rating drove Tesla’s stock price to 171%. Tesla plans to rev up a sport utility vehicle called the Model X in the next few years.

Energy Secretary Ernest Moniz said “While the market has taken longer than predicted to get going, sales of electric vehicles in the U.S. tripled last year and are continuing to increase rapidly in 2013. Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market.”

At Ford Motor’s annual meeting, executive chairman Bill Ford said “My hat’s off to them. It’s really hard to start a company, particularly in the auto business, and be successful.”