Chrysler has repaid $465 million of loans from the US Department of Energy nine years early as sales rise – a first, say Tesla. But Chrysler disagrees.
2013 is turning in to a very good year for Tesla.
The Tesla Model S has had more praise heaped on it than almost any car ever has, they are making an operating profit and their shares are going through the roof. So with the stars aligning for Tesla they’ve taken the opportunity to pay back $465 million of US Department of Energy loans, nine years early.
That repayment has been done on the back of the seemingly inexorable rise in the Tesla share price – up from just over $30 a share in January to around $90 now) making it very easy for Tesla to sell enough shares to raise $1 billion dollars and repay the Advanced Technology Vehicle Manufacturing program loans with interest.
Elon Musk is suitably chuffed that Tesla is now free from the US government loan. He said:
I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate.
I hope we did you proud.
Elon Musk is also claiming the loan repayment a first, and in a sense he’s right. It’s the first US loan under the ATVM programme to be repaid in full, but Tesla’s not the first car maker to repay government help early.
Chrysler were quick to respond to Musk’s claim this morning, pointing out that they repaid – in full – the bailout loan from the US government two years ago – six years early and with interest – and ended their statement by asking whether Tesla’s claim was a short term memory loss or a short circuit.
But whatever the claims being made about repayment of government loans to car makers – and both Tesla and Chrysler are right – it’s a big vindication of the US government’s willingness to prop up the US car business through bad times and technology growth.