Tag archives for atvmp

Tesla selling new stock, debt worth $830m in order to pay off DOE loan





Anyone paying attention to the electric vehicle scene for the last few weeks knows that the stock value of Tesla Motors has been climbing faster than a SpaceX rocket. As of this writing, TSLA is sitting pretty at $92 a share. Three weeks ago, it was at a then-record-high of $53.



In light of all the commotion, Tesla is going to make some money and pay back the government. The company announced yesterday it will sell 2.7 million shares (with a value of $229 million given the closing price of $84.84 yesterday) and $450 million in convertible senior notes. All told, Tesla will sell up to $830 million in shares and debt and use the money to pay back its $465-million Department of Energy loan. The DOE has agreed to let Tesla modify the terms of its loan and repay the money early., but the exact timeline of the repayment was not specified. As Tesla CEO Elon Musk put it to Bloomberg earlier this month, “Of all the car companies that got government funding, we got the least, and we’re going to pay it off first. That’s not bad.” Musk will also buy $100 million worth of shares, $45 million in common stock and $55 million to be be “purchased directly from Tesla in a subsequent private placement.”



The DOE handed out four loans through the Advanced Technology Vehicles Manufacturing Loan Program: along with Tesla, Ford got $5.9 billion, Nissan got $1.6 billion and Fisker got $529 million. Tesla’s press release is available below.

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By Sebastian Blanco

DOE still has $16.6 billion left in ATVM loan program





The US Government Accountability Office (GAO) is questioning why Department of Energy (DOE) loan funds are not paying out as planned. The participation hurdle is high, and there’s about $16.6 billion in green vehicle loan appropriations going unused, the GAO found.



The funds come from DOE’s 2005 Loan Guarantee Program and its Advanced Technology Vehicles Manufacturing (ATVM) loan program from 2007. These programs were a directive from Congress, but now House and Senate lawmakers on the powerful appropriations committee are hearing about the programs stalling out. The GAO report also told legislators that the DOE hasn’t “closed on a loan or loan guarantee or conditionally committed to do so under either program since September 2011.”



The GAO had interviewed applicants for the loan programs to evaluate the DOE’s performance and found that it the “costs of participating outweigh the benefits.” Those costs include a “lengthy and burdensome” application and review process and lots of documents needed to apply. The failure of the solar energy company Solyndra was also mentioned as making participants skittish about working with DOE and the Obama administration. It’s not just green car money that’s sitting unused. There is $34.8 billion left in various renewable energy project loans, but here, at least, there are 13 “active” applications.



The DOE might be finished issuing funds through the programs automotive. While the funds don’t have an expiration date, DOE says it will continue to receive applications and it doesn’t plan to use the remainder of the appropriated funds.



Ford, Nissan, Tesla and Fisker did receive ATVM program funds. Tesla is doing well enough to pay the loan off early but Fisker had its funding cut short and is not in a good position to pay it back any time soon.

By Jon LeSage

Tesla involved in federal probe? News to us, says Tesla

tesla model s logo



A recent report indicates that there’s a dark and shadowy secret just waiting to wreck havoc on Tesla Motors: a federal probe into whether, as the conservative Washington Times puts it, “the automaker was using foreign instead of American parts in manufacturing their electric vehicles.” Tesla has openly said it uses Panasonic battery cells, for example, so the need for a probe is not quite clear.



According to a PDF that the Times says comes from an Immigration and Customs Enforcement (ICE) investigation, ICE asked the Department of Energy for documents about the Advanced Technology Vehicles Manufacturing (ATVM) loan program on December 5, 2011. There are lots of “may” and “possibly” phrasings in the memo, and it reads like someone saw a mention on the DOE website about a “buy American” requirement and went fishing for information. The DOE responded on December 22 that “the $465m Tesla loan was not appropriated through the Recovery Act of 2009. The $465m Tesla loan was actually appropriated through Public Law 110-329 and does not have the buy American requirement,” adding that “The DOE [Office of Inspector General] would not be investigating this matter any further.” For some reason the Times concludes that the memo, “provides no information on how, or whether, the customs probe concluded.”



A Seeking Alpha contributor notes that the ICE:

is still proactively investigating whether Tesla is using its foreign trade zone status to bypass the so-called “loan requirements.” A foreign trade zone facilitates the creation of certain areas at or near customs port of entry where products can be imported without standard import duties and customs entry procedures. Tesla’s application for a “subzone” within San Jose’s foreign trade zone was approved in September. ICE is neither affirming nor denying an investigation. Also, Tesla has made no mention of this investigation in its SEC disclosures.

He add that he’s not worried about a negative impact on TSLA stock or the company based on the investigation. For the record, Tesla’s official statement is as follows:

We have not at any time been made aware of an investigation regarding this issue by ICE or any other governmental agency. It is customary for car manufacturers in the United States to use imported parts and we have openly indicated throughout the development of Model S that we purchase certain parts, like the cells used in our battery pack, from foreign suppliers.

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By Sebastian Blanco