The co-founder of Tesla Motors set another milestone for his electric car company today by making a final $451.8 million payment on the $465 million loan from the U.S. government — nine years earlier than scheduled. The massive payment came courtesy of a stock offering last week that raised $1 billion for the California automaker, made possible after it revealed its first quarterly profit. The move makes Tesla the only automaker to have paid back its Department of Energy loan in full — yet another talking point for Musk's EV drive.
Now comes the hard part.
It's fair to point out that other automakers received far larger loans from the Advanced Technology Vehicle Manufacturing program; Ford borrowed $5.9 billion, while Nissan took $1.4 billion, both for modernizing plants and vehicles to build hybrid and electric vehicles. It's equally fair to note both have far more resources than Tesla to pay back those loans and attempt to reap a similar victory lap to the one Iacocca made after paying off Chrysler's bailout early in 1983.
Tesla's pay-off marks a rare bit of good news for the Department of Energy program, which has seen its loans to Fisker and an Indiana start-up end in shuttered companies. When it was made in 2010, the loan gave Tesla credibility among private investors, something rival EV startups which couldn't get such backing were never able to generate.
“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,” Musk said in a statement. “I hope we did you proud.”
Whatever goodwill Musk can generate from paying the loan early will be needed on the hard road ahead; fighting to sell Teslas without dealers, raising revenues to make up for EV credits that added more than $60 million in the first quarter and developing the Model X SUV due late in 2014 and other models. Musk has already warned that Tesla won't make a profit this quarter, and other luxury automakers have begun to take note of his success. Running an automaker is like managing a nuclear reactor; it's a powerful machine at full strength, but a few small mistakes can lead to a meltdown. Just ask Lee Iacocca.