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Tesla repays department energy loan nine years early
- Thread starter clea
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- Tesla Inc.
And even now there will be people saying they should never have received the loan in the first place. Haters will be haters.
Although I disagree with their philosophy, those who believe that no industry/company should receive government assistance are not haters of Tesla. Then there are those who selectively focus on green subsidies and loans are out to make a political point--hypocrisy is really irritating. It's just the way of the world.
sp4rk
Banned
Paying back the loan is awesome, however... couldn't Tesla have used that 400 million to dramatically increase the Supercharger rollout, or invest in themselves in some other way that would improve business? A 9 year low-interest loan is hard to get, and I can't help but wonder what Tesla could be doing with that money. Maybe I'm looking at it backwards?
bollar
Disgruntled Member
Like mentioned earlier in this thread, Ford received almost $6 billion in ATVM funding that has not been repaid. This is the same program Tesla drew from. DOE-Loan Programs Office Ford Motor Company
There's $550 million left, plenty of money on top of what was already planned for capital investments. That money will go a long way.
bollar
Disgruntled Member
I somewhat agree with you. To me, the biggest value is when Tesla is in front of Congress, or State legislatures working their agenda and can assert that they have paid off their "government loans." This came up most recently in North Carolina last week, where the basically uninformed lawmakers tried to make some news by pressing Tesla on these loans.
From a public policy and marketing perspective, refinancing the DOE debt may have a great ROI. Being able to say, "Yes, Senator, we had DOE loans, but because of our great car and business model, we were able to pay the American people early in-full, with-interest." is extremely powerful.
Plus, as has been pointed out, they prevent the DOE from getting a bunch of stock on the cheap (I forget which years those come into play).
jeff_adams
Member
The DOE loan terms constrained Tesla. For instance, they couldn't build cars outside of the US. Now they can (if it makes economic sense). They have the Tilberg factory. Add some robots there and they could really ramp up production
http://www.usatoday.com/story/money/2013/05/23/elon-musk-tesla-motors-model-s/2355321/
Elon's response to Chrysler.
Elon's response to Chrysler.
In this talk with Bloomberg, Elon said that he didn't expect to have to raise capital for the Model X or Gen. 3 launch. He then went on to say that it would take a billion dollars to launch the Gen. 3.......:scared:
Am I misinterpreting that or does that mean that Elon expects to store up a billion dollars before ~2016? (~11 quarters) I think thats about when R&D and factory expansion would start under their current timetable. I'm not an expert but I think that maybe a bit optimistic considering where they stand currently. I think their cash reserves are in the 600-800 million range after they paid off the DOE. Model X will probably cost about another 200 million in R&D. And at some point they may have to advertise or extensively update Model X.
Anybody have any thoughts on this to help me understand this?
Am I misinterpreting that or does that mean that Elon expects to store up a billion dollars before ~2016? (~11 quarters) I think thats about when R&D and factory expansion would start under their current timetable. I'm not an expert but I think that maybe a bit optimistic considering where they stand currently. I think their cash reserves are in the 600-800 million range after they paid off the DOE. Model X will probably cost about another 200 million in R&D. And at some point they may have to advertise or extensively update Model X.
Anybody have any thoughts on this to help me understand this?
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Hmm, maybe that's over time? For example, maybe he knew there would need to be a network of superchargers and the rollout would be 250 million. Maybe getting service center coverage is another 500 million. Made up numbers, but I think you get the point. Maybe its 1 billion to get them to where they need to be at the launch of gen 3
It typically takes at least a billion to launch a new model of car. Tesla actually did the Model S "on the cheap" compared to major automakers.
This is why automakers love to build derivative models. Costs a lot less!
This is why automakers love to build derivative models. Costs a lot less!
I think even then they should be hoping to get a little more money. If that projection is his honest bet on the future, I should be buying stock right now!! That would have to be huge profits in each quarter! I'ma HUGE fan but I don't think that reasonable considering the amount of the stuff they still have to create and make.
It would be at year 5 of the loan. That's why, even though the loan was for 10 years, Elon was pushing for 5.
And remember everyone, the original loan was a 25 year loan. Tesla negotiated for access to the full amount of the money in exchange for the ten year payback. Ford and Nissan will be paying back their loans for another 24 1/2 years.
Even the title of this thread is both right...and wrong.
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