Tesla Motors has repaid a $465 million loan to the Department of Energy nine years ahead of schedule, becoming the first of several car companies to repay its share of a multibillion-dollar program meant to spur electric vehicle development. The company announced today that it had made a final payment of $451.8 million, drawn from the more than $1 billion the company recently raised in a major stock offering last week. Tesla recently turned the first profit in its decade-long history, posting income of $11.2 million last quarter after launching its Model S sedan in 2012.
Tesla's loan was secured under the Department of Energy's Advanced Technology Vehicles Manufacturing (ATVM) loan program, created by Congress under the Bush Administration but implemented in 2009. As part of the program, Tesla was given nearly half a billion dollars to develop its electric cars. It was slated to pay back the loans by 2022, but CEO Elon Musk has said from the start that he would likely be well ahead of that deadline. Tesla has also taken pains to distinguish its loan from the "bailouts" offered to American auto manufacturers Chrysler and GM.
Tesla was famously called a 'loser' by Mitt Romney, but it's become a success story for electric vehicles
With this repayment, Tesla becomes a success story for the Obama Administration's green energy loans program, which has been criticized by Republicans as a failed attempt to prop up alternatives to fossil fuels. Tesla was once derided as a "loser" by then-presidential candidate Mitt Romney, who likened it to now-bankrupt energy company Solyndra — a beneficiary of another Department of Energy loan. Its repayment of the loan likely won't placate critics. "When they're picking all these losers, it's nice for them to have one where they can point to," Representative Jim Jordan (R-OH) told Bloomberg upon hearing the news.
Overall, the ATVM's legacy is still mixed. Ford and Nissan received much larger grants: Ford got $5.9 billion to renovate factories across the country and improve its vehicles' energy efficiency, and Nissan was given $1.45 billion to support production of its Leaf electric car. Both these companies are still reportedly in compliance with the Department of Energy's terms, but neither has fully repaid its loan. According to Bloomberg, Ford still has $5.5 billion to go.
Not all recipients, however, are doing as well. Like Tesla, Fisker was once a promising producer of luxury electric cars. In 2010, the Department of Energy granted it $529 million, but funding was frozen in 2011 after it failed to meet milestones. Since then, the company appears to be on the verge of bankruptcy, and it recently missed an initial $10 million payment. Despite some initial publicity problems with its Model S, Tesla seems to have avoided that trap — and in the coming months and years, it plans to bring the electric car to a broader consumer base.