Apparently some people don’t like being beholden to others. At least that seems to be the case for Elon Musk’s Tesla Motors. On Wednesday (May 22), the high-end electric vehicle (EV) maker announced that it fully repaid the $451.8 million that it borrowed through the Advanced Technology Vehicle Manufacturing program, making it the first auto manufacturer to do so.
The repayment is also just another sign that the Department of Energy’s advanced energy loan programs are actually doing what they were supposed to do, create jobs and reinvest in the country’s economy following the great recession. The DOE invested in emerging technologies, like EVs, and EV chargers, solar and new battery technologies under Presidents Bush and Obama. However, it’s been more famous for supporting failures, like Solyndra than it has for supporting successful efforts like Tesla—even though its loan programs are still performing better than expected.
Hopefully Tesla’s early repayment—about nine years early, will restore some faith that the DOE can help some companies emerge from research and development phases into fully emerged, commercial products.
“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, Tesla’s co-founder said upon repaying the loan. “I hope we did you proud.” The made the loan repayment after raising roughly $1 billion in funds in common stock and convertible senior note options.
The Advanced Technology Vehicle Manufacturing program was signed into law by President Bush in 2008. But the funds for Tesla were awarded by the Obama administration. Tesla was awarded the milestone-based loan in 2010. To win it, the company had to raise enough private funding to match the federal loan. It accomplished the leveraged funding through through its initial public offering.
Tesla’s been around for just about a decade now and until receiving the federal loan it was primarily bankrolled by Musk and other investors. It’s Roadster, based on a Lotus, proved popular with purchasers and last year it introduced it’s Model S, the first car the company has designed from the ground up. The Model S is also receiving rave reviews from automotive magazines, like receiving Motor Trend’s 2013 car of the year award and being named 2013 Automobile of the year by Automobile Magazine.
The Model S also has free access to Tesla’s growing network of PV-powered EV charger network, which the company is building out along high-traffic corridors in the US Southwest and Northeast first.