Tag archives for doe loan

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

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

What $20 million means to both Tesla and Fisker

When is $20 million not equal to $20 million? When, for some, it’s an interest payment and, for others, it’s all someone else thinks they’re worth. Here’s how that one number means two totally different things to two different green car companies.

Speaking to Bloomberg Television about the early repayment of Tesla Motors’ DOE loan, CEO Elon Musk said today that, “ultimately, the US taxpayer actually made a profit above $20 million on this loan. For this loan at least, people’s tax bill actually went slightly down.”

Musk said that, now that the loan has been paid back, more people might take a look at Tesla. “We were attacked a lot in certain quarters for having some government debt,” he said. “I think that actually matters to some consumers out there, whether or not a company actually does have government debt, and being able to say we fully repaid that debt with interest, I think it is helpful to some number of people out there in thinking about buying a car.” So, for Tesla, which recently raised over a billion dollars, $20 million is an easy price to pay to potentially sell more EVs.

Now, let’s look at Fisker Automotive, which is still fending off bankruptcy. We learned this week that VL Automotive and Wanxiang made an offer to buy the troubled automaker for an undisclosed sum. Word out today is that the amount that the two companies are willing to pay for Fisker is, you guessed it, $20 million. That’s about one percent of Fisker’s $2 billion-plus value back when the Karma plug-in hybrid was launched, according to Reuters. It’s unclear how a potential Fisker buyer will have to deal with the outstanding DOE loan amount of $171 million and other issues, but the $20-million offer a striking contrasts to Musk’s statement on Bloomberg Television, which you can watch in the video below.

By Sebastian Blanco

Tesla DOE Loan Repayment to Finish Years Early

With confidence in spades, Tesla CEO Elon Musk said yesterday that the electric car maker will repay its $465 million government loan in “five years or less.”

The announcement came just days after Musk said he expects the company to be profitable in 2013. Indeed, deliveries of the brand’s second vehicle – the Model S – have picked up with  2,400 shipped in the fourth quarter compared to only 250 during the previous three.

Despite that, Tesla is still losing money so far. The company posted a loss of $89.9 million in the fourth quarter.

SEE ALSO: Chinese Volvo Owners Likely to Buy Fisker

Tesla is faring relatively well, though, compared to automakers like Fisker. Last year the maker of the exotic Karma plug-in hybrid suffered a salvo of negative press after several of its cars caught fire in separate scenarios. Now, Fisker is looking for possible suitors.

Discuss this story at Tesla-Buzz.com

 [Source: Automotive News]

By Luke Vandezande

Tesla’s Musk says Obama win means good things for plug-in vehicles

tesla ceo elon musk

That gift horse? Elon Musk ain’t looking it in the mouth.

The Tesla Motors chief appears to be pretty happy about last week’s presidential election results, saying that four more years of President Barack Obama likely means more electric vehicle (EV) production, Reuters reports. More newsworthy, Musk also said that the first East Coast Superchargers will soon be installed in Washington, DC and Boston.

Musk added that, unsurprisingly, he’d support raising the federal tax credits for EVs to as much as $10,000 per vehicle. That’s about a tenth of the pricetag of a top-of-the-line Tesla Model S sedan, which just won Motor Trend magazine’s 2013 Car of the Year Award. Obama previously suggested the $10,000 level, which would represent an increase of $2,500 to the maximum tax credit currently allowed.

EV production subsidies were a hot topic leading up to the election, with Republican candidate Mitt Romney taking aim at US Energy Department (DOE) loans to companies like Tesla, Fisker and Ford. Tesla received a $465-million DOE loan in 2010.

Not to merely rest on federal loans, Tesla said last month that it will get $10 million from the state of California to upgrade its San Francisco Bay Area factory for Tesla’s Model X crossover, which is slated to start production in 2014.

By Danny King

Tesla Motors CEO on production rate, positive cash flow and DOE loan

tesla ceo elon musk

A new blog post by Tesla Motors CEO Elon Musk shows a bit of attitude, reacting to the way the company’s stock and reputation took a bit of a hit last week (despite its supercharger announcement) after downsizing its 2012 production and resulting revenue estimates. Tesla also announced a follow on stock offering, which had some pessimists pouring themselves some long tall glasses of haterade.

Elon’s response? Well, he makes it clear that things are going pretty well, actually. Tesla, he says, is doing another funding round as a means of risk reduction, not out of necessity. Wham! Further, the automaker will likely be cash flow positive by the end of next month. Bop! Also, despite being a few weeks behind in production – due, in part, to flood damage at a supplier – the company has built 500 vehicle bodies, finished 359 Model S sedans and placed over 250 in the hands of customers. Pow!

He also goes on to state that Tesla has never suggested postponing its DOE loan repayment. Yes, it did renegotiate some terms that weren’t part of the original arrangement, but the federal agency is still confident in the company’s ability to pay up and is, in fact, bullish about Tesla’s future. Finally, he reiterates once again that the company fully intends to pay back the DOE “at the earliest opportunity.” There has even been talk of early repayment. You can read Elon’s words here.

By Domenick Yoney

Tesla pays back $465M DOE loan, Musk says ‘I hope we did you proud’

elon musk with tesla model s

We’re willing to bet there are bottles of champagne popping all the way from Washington, DC to Palo Alto, CA today with the announcement that Tesla Motors has, as suspected, paid off the entirety of its $465-million Department of Energy loan.

“I hope we did you proud” – Elon Musk

As far back as July 2012, Tesla began talking about paying the US government back early, but it was apparently the tremendous rise in the company’s stock value recently that prompted CEO Elon Musk to push for the immediate repayment this week. From a price of $33.87 on January 1, TSLA has climbed to $87.24 today (down a bit from the recent highs of over $92). Last week, Tesla sold enough stock to raise over a billion dollars to repay the Advanced Technology Vehicle Manufacturing (ATVM) loan, with interest. This makes Tesla the first automaker to pay the DOE back, and it did so nine years ahead of schedule. In a prepared statement, Tesla CEO Elon Musk thanked the DOE and Congress and “particularly the American taxpayer from whom these funds originate. I hope we did you proud.”

The DOE is certainly proud, issuing a release that said the repayment “shows the strength of energy department’s overall loan portfolio.” The DOE has come under fire recently for the loan it gave to Fisker Automotive. Two other ATVM recipients, Nissan and Ford, have not yet paid all theit money back, but there are no apparent worries there, either. Energy Secretary Ernest Moniz said in a statement that, “not every investment will succeed” but that the DOE’s overall $34-million loan portfolio of more than 30 loans “is delivering big results for the American economy while costing far less than anticipated.” Details in the press releases below.

By Sebastian Blanco

Tesla will have to pay back DOE loan early, says it’s ready to do so

tesla model s

The 0-60 mile per hour acceleration time of the top-of-the-line Tesla Model S is 4.4 seconds. Now, the federal government is looking for Tesla Motors to similarly pick up the pace.

The electric vehicle maker, which received a $465 million credit line from the U.S. Department of Energy, is being asked to speed up its repayment pace once Tesla starts paying off the loans later this year, the company said in a Securities and Exchange Commission document.

Tesla is supposed to begin payments in December and has until October 31 to put together a proposal outlining its faster repayment schedule. This new schedule is required because of a September 24 waiver that changes Tesla’s specified current ratio of assets to liabilities, writes Bloomberg News. Tesla CFO Deepak Ahuja told Bloomberg that the company could beat its 10-year repayment schedule if Tesla becomes profitable earlier than expected. Thus far, the DOE told Bloomberg, “Tesla has made loan payments on time and in full.”

Earlier this week, Tesla, which has never been profitable, reduced its 2012 revenue forecast by about $160 million to as much as $440 million because of supplier issues and other delays related to the Model S, and said it was about a month behind schedule with its vehicle deliveries. As of September 23, reservations stood at about 13,000. Tesla said in July that it may start repaying its loan before its first payment due-date in December. As of late June, Tesla had yet to draw down the last $33 million of the loan.

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By Danny King

Following Tesla’s good news, Fox conveniently forgets government loan

tesla motors on fox news

It’s been a while since we’ve paid attention to Fox News attacking electric cars, but has it really been long enough for them to forget some pretty salient details? Looks like it has, according to a new video from Media Matters, which splices together clips from before Tesla Motors made its big profit announcement and the company’s other recent items of good news.

In all the “before” clips, the hosts and commentators just can’t seem to mention Tesla without also saying something about taxpayer money and losers (ring a bell?). In the “after” parts, well, just watch. It’d be funny if it wasn’t so depressing. See how it all comes together below.

By Sebastian Blanco

Tesla raises $1 billion as stock climbs; predictions have it at $200 (or $37) *UPDATE

tesla model s logo

Despite the company’s recent string of successes, there’s still a lot of skepticism about Tesla out there. Some of the negativity focuses on the lack of recharging infrastructure, some on the company’s expensive cars and how it’ll be difficult to make a mass-market car. And when it comes to the company’s stock price – TSLA is currently at around $90 – the predictions are all over the map. Some say it’s still worth shorting (that is, predicting it will drop). Some say it could reach $200 before too long; others warn it will fall to somewhere in the $20-$40 range.

“There is a fundamental view of a scenario where Tesla becomes the next GM or Ford.”

Still, the big news – that is, something that’s actually happened, not just bloviations about the future – is that Tesla raised more than a billion dollars in cash last week by increasing the amount of debt and equity it was offering. Instead of selling a total 2.7 million common shares, CEO Elon Musk put up 3.39 million, and bought $100 million himself. This showed confidence, which was admittedly already there, and Tesla raised far more than the $830 million originally expected. The money will be used, in part, to pay back the US government for the $465-million Department of Energy loan.

The good news prompted an unnamed banker to tell IFR what it looks like on the other side of the skepticism spectrum: “[CEO Elon] Musk has a vision of creating a $50 billion-plus company in five years,” adding, “There is a fundamental view of a scenario where Tesla becomes the next GM or Ford.”

*UPDATE: Musk just Tweeted that Tesla will likely pay back the DOE loan Wednesday.

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By Sebastian Blanco