Tesla Confirms DOE Loan Approval. Possibly.
It can be so hard to tell when the firm’s CEO is so notoriously at odds with reality. So let’s just say that we’re entering Elon Musk’s world, grains of salt available upon request. In fact, the news comes from a Musk email that Jason Calcanis has posted verbatim to his blog (cross posted at Tesla Motors). The main point of the email seems to be to convince the reader that Tesla isn’t about to disappear with the credit market, citing a deal with Daimler to electrify the Smart, a $40m investment round and the near sellout of all 2009 Roadsters. Even better, if you lay out $100k for a Roadster now, you might just have a new cashflow opportunity to get you through the hard times. “Due to our order backlog, it seems that owning a Roadster can be a good investment,” writes Musk. “Last September, as the financial and real estate markets began crashing, a Roadster was sold at the Sonoma Paradiso in California wine country for $160,000, well above the current list price of $109,000.” And if you buy that, I’ve got some mortgage-backed structured invesment vehicles that you might be interested in. But the big news is that Tesla may or may not get funding from the biggest sucker of them all: the US Federal Government. Or not. (Hat Tip: minion444)
“I am excited to report that the Department of Energy informed Tesla last week that they may disburse funds from our $350M Model S loan application within four to five months,” writes Musk. May? Might? Could? Sorry Elon, but I like a little more specificity out of my conjugations. “The Obama administration has thankfully made it a top priority to move quickly on the Advanced Technology Vehicles Manufacturing loan program, as this will both generate high quality jobs in the near term and lay the groundwork for a better environment in the future. ” And again, nothing specific to Tesla there. I smell some trademark “reality issues.” Especially because there isn’t a peep yet from the DOE. Which begs the question: if Musk is fudging his verbs to imply loans are forthcoming when it’s no sure thing, how on earth is anyone supposed to believe his repeated insistence that Tesla is not in financial trouble?
David Dennis on Feb 14, 2009
It's not confirmed yet, but I'm going to go out on a limb and say Tesla will, in fact, get the money. Why? See the WSJ about the DOE's stimulus problem in general: http://online.wsj.com/article/SB123448815417580333.html?mod=WSJ_TimesEMEA It seems obvious that they are desperate for good proposals at this point, and under enormous pressure to show immediate progress. Supporting Tesla is "shovel ready" - the plant's already planned and vetting of the application is already well underway. With Tesla's ambitious (to say the least) schedule it seems clear that the money will be spent quickly. Furthermore, Tesla has a lot of customers who really love their products. The Stimulus bill was a dreadful mess, and I am no defender of it. But if you want to throw money away, handing it to Tesla seems like one of the more interesting things you could do. The money will hit the economy much faster than any infrastructure proposal and being non-union it will create more jobs per dollar. Furthermore, it would go to a company that at least makes a unique, innovative product beloved by its (admittedly few) customers. There are a lot of things in that Stimulus, many for far more money than this support of Tesla, that are far more probematical and dangerous. I just hope Elon Musk shows himself to be a leader capable of pulling off the new factory and car design. Even with the loan, it's still all being done on a shoestring. The $500-odd million is maybe $5 per taxpayer and I give my share of that ungrudgingly. It's worth that in entertainment value alone. Will Tesla make it? Will WhiteStar be boom or bust? We're about to find out, and it should be a wild ride. D
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- KevinB Because they sell every EV they make, and most of the time you need to be on a list to get one. That's why the cost of them isn't going down.
- Oberkanone Cost of EV's will continue to increase as demand for materials to manufacture batteries increases. Owning a personal vehicle will only be attainable to the wealthy.
- Kcflyer I think it's ugly. Unless they lengthened the cab the back row is still useless for me anyway. Price is proof that I may have purchased my last new vehicle
- Ltcmgm78 I must laugh because this is an expansion of the old question of why car manufacturers don't build less expensive cars. There's no money in it! As long as virtue signalers have the long green to buy the pricier EVs, there won't be any affordable ones until most of the demand for the expensive ones are met. Economics, you know. New technologies always progress this way. The future Chevy Vega on the Ultium platform is a long way off.
- Daniel J Also, the additional 20K is spread out over a loan, which could end up closer to 24K.