By on February 27, 2013

Tesla announced plans to pay down their $465 million dollar Department of Energy loan in 5 years or less, as Tesla seeks to achieve profitability.

Automotive News reported on comments made by Tesla CEO Elon Musk while attending a conference in the Washington, D.C. area

That loan currently must be repaid within 10 years, Musk said. Tesla will “codify” a commitment with DOE to reimburse the government within five years or less, Musk added, after declaring that the loan guarantee should be “viewed as a success.”

In addition to Tesla, Ford, Nissan and Fisker all received loans under the $25-billion dollar program Advanced Vehicle Technology Manufacturing program, which was introduced by President George W. Bush.

Ford and Nissan’s loans are worth $5.9 billion and $1.4 billion respectively, and Energy Secretary Steven Chu said that he expects to be paid back in full by the auto makers, despite other loans that “…may be at risk”. According to Tesla’s 10-Q filing for Q4 2012, the company made its first loan payment of $12.7 million on schedule, with the next payment due in March.

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12 Comments on “Tesla To Pay Down DoE Loan In 5 Years Or Less...”

  • avatar

    What are they going to use to pay down the debt quicker — cash flow? And if so, how many cars per year do they need to sell to do this?

    • 0 avatar

      A lot – like 10,000 annually or something.

      I think daviel might be right – Musk may make the last payment himself.

      • 0 avatar

        They’ve delivered thousands of cars (counting Roadsters and the Model S), so selling 10k cars per year sounds aggressive, but doable. IIRC, it’s in line with their announced production plans, too.

        So the only question is whether the demand is there for technologically advanced Anerican-made luxury car.

        How many cars are sold in the $60k-$100k range every year? They can probably get a few percent of that pretty easily, so we can submit their claims to a rough sanity check that way.

    • 0 avatar

      They are gonna need to push out the Model X and then they are gonna need a cheaper version of the Model S.

      I hope they can pull this off, but America is cash poor and credit poor. i think they’ll do better outside the country.

      • 0 avatar

        Both would be welcome!

        But they might be able to sell 10k model S’s a year for a while. They seem to have done a marvelous job of assessing the demand for the Roadster and selling the right number of those so that almost everyone who wants one and can afford one has one (and their used prices remain high), so they maybe they have a decent handle on the demand for the S?

        I don’t actually know, though. I’d love to see their methodology, without having their lawyers club me like a baby seal afterwards…..

      • 0 avatar

        This is not true (though certain media outlets keep pushing this meme)

        The level of inequality is as high (or higher) than the great depression, which is probably why the bulk of people feel like the world is collapsing — but in reality, the 1% have made out like bandits, and are richer than they’ve ever been. And they are the people that Tesla’s cars are squarely aimed at, not you, not me.

        If Tesla can establish themselves as a high-quality, premium brand (and the Model S is helping), I don’t think they are going to have trouble shifting 10k units.

  • avatar

    Musk will just write a check out of his personal account.

  • avatar

    Unless it’s cold outside, in which case they get to pay it off over 15 years.

  • avatar

    So.. let’s say in 5 years, Tesla is fairly successful, but not successful enough to pay back $465 million dollars. What happens?

  • avatar

    Who gives a toot what Elon Musk “declares”, or “codifies.” Either you pay, or you don’t. All else is just mindless babble, for consumption by well indoctrinated drones gullible enough to believe anything anyone involved in this nonsense says, is any more than randomly related to some sort f objective reality.

    It’s like listening to the monkeys in DC yapping about “reducing the deficit by blah, blahh percent in 20 years…….” Just pure nonsense. 100%.

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