Elon Musk, Tesla‘s CEO, stated at the Advanced Research Projects Agency for Energy’s summit today that the company will repay the loans it received from the Department of Energy ahead of time, giving a time frame of half the time it was given for doing so. This puts the payoff completion date sometime around 2015, with the company being on the hook for $465 million.
The loan proved to be very beneficial to Tesla, which is reaping the rewards of its efforts. The loan was provided as part of the Advanced Technology Vehicle Manufacturing program, and gave Tesla a means to revamp a California auto plant to makes it popular – and lately, controversial – Model S vehicle. The announcement was given alongside energy secretary Steven Chu.
The program under which Tesla received the loan has been a source of controversy, with many pointing out that one of the companies that received money under the program – Solyndra – was unable to repay it. In light of this, for Tesla to not only repay all of the money, but to do so well ahead of schedule will be a massive boon for the program.
Though the claims by Tesla are a positive thing, the company has not yet churned a profit. Other manufacturers who have received funds under the program are also expected to pay back the loans they received, with Chu specifically citing Ford and Nissan. Thus far, the Department of Energy has shelled out over $8 billion in loans, and only time will tell whether it pays off in the end.
[via MIT Technology Review]