Tesla Pays Back Gov Loan 9 Years Early

Tesla has become the latest success story of an automobile company paying back their entire Department Of Energy loan nine years early, and with the government earning interest money for the Treasury Department as well. Both GM and Chrysler have paid back government TARP loans with interest for the Treasury Department as well, with only the tiny Fisker Company being the only automobile maker to face failure despite government loans.

Critics of the government loans to aid the U.S. auto industry have been mostly from some political conservatives, despite the overwhelming success of government loans to automakers, which not only saved some companies like GM or Chrysler, or allowed other companies like Tesla to expand and flourish, as well as to pay interest to the government.

Tesla models have recently won some consumer awards as one of the finest quality U.S. made automobiles ever produced.

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  • cirby

    What this story leaves out is that they never actually used $330 million of that money – it sat in the bank until they “repaid it.” With the insanely low interest level they were paying, it didn’t cost them much, and by having that reserve, they got some real sweetheart deals on other things. Tesla also (quietly) asked for yet another loan – in an undisclosed amount – for future use.

    They were going to use it to buy and upgrade the old NUMMI plant in Ontario, California, but after buying the facility from Toyota for $42 million (with some huge discounts for equipment), they only use a small fraction of the building due to continuing low demand.

    They also got quite a few grants – California gave them $20 million free and clear to develop an SUV version, for example, and over $561,000 to develop a UL-approved charging station for their cars. They also got a whole lot of smaller ones, mostly related to “green energy” freebies and tax breaks for the companies that invested in Tesla Motors.

    Their “supercharger” network is heavily subsidized by the government, as are all of the other charging stations you see.

    Tesla also got indirect subsidies on batteries – the company that originally supplied them got $250 million in grants (and went bankrupt). Don’t forget to add in the zero-emissions vehicle credits they get to sell to other companies (they got over $12 million in those credits by 2010, and are getting more on a regular basis).

    With all of this added together, Tesla has had _one month_ that was profitable, with a total profit of $1 million or so.

    • Honda and many foreign brands actually got tax break deals from a number of states for simply providing jobs. The fact of the matter is that most U.S. carmakers survived the worst days of the recession due to some sort of government help, rather than only Ford and all the import brands surviving. Our country is now stronger for this reason. But, I appreciate your further facts here, very much. Thank you for your comment. – Paul Hooson