Tesla Motors Inc. (TSLA), the electric-car company led by Elon Musk, is using the last of its $465 million in U.S. loans and plans to start repaying them by the end of the year, the first startup to fulfill requirements of the criticized program.
The maker of Roadster sports cars had $104.5 million left as of March 31 of the Energy Department loans awarded in June 2009, Tesla said in a regulatory filing. The remaining funds will be used by the third quarter, with repayments to begin in December, Chief Financial Officer Deepak Ahuja said.
“We are delivering on the milestones, what we’ve committed to,” Ahuja said yesterday in a phone interview. “Once we are delivering customer cars, then that signifies completion of the project.”
Tesla this week said the first battery-powered Model S sedans will be delivered in June, ahead of its initial July release date. That’s an early success among the Advanced Technology Vehicle Manufacturing loans the Obama administration awarded in 2009 to Tesla, Fisker Automotive Inc., Ford Motor Co. and Nissan Motor Co. to spur jobs and a market for autos using little or no gasoline.
“We are pleased that Tesla continues to make progress and look forward to working with them as clean, electric vehicles play an important role in our energy future,” Damien LaVera, an Energy Department spokesman, said yesterday in an e-mail.
The so-called ATVM program, as well as Energy Department loans to failed solar panel maker Solyndra LLC, have been criticized as wasteful by Republican members of congress. Mitt Romney, the presumptive Republican nominee for president, has described loans to Tesla and Fisker, the luxury plug-in hybrid maker, as “crony capitalism.”
Tesla used its loans to renovate and equip a factory in Fremont, California, that shut down in early 2010 after serving as a joint-venture plant for Toyota Motor Corp. (7203) and the former General Motors Corp. for 25 years. Federal funds also were used for lithium-ion battery and electric motor assembly lines.
Tesla’s factory had 600 workers in April, and will employ between 1,200 and 1,500 people by year end, Gilbert Passin, vice president of manufacturing, said in an April 10 interview.
Tesla also supplies battery packs and electric-vehicle motors for Toyota and Daimler AG (DAI), which are also investors in the company. Tesla this week disclosed a new supply agreement with Daimler for a vehicle due by 2014.
Interest rates on the loans range from 0.9 percent to 3.4 percent, according to the filing. The loans must be fully repaid in 10 years, Ahuja said.
Fisker, based in Anaheim, California, said in February the Energy Department blocked access to some of its $529 million loans last year for failing to meet milestones including delivering Karma plug-in sedans on time. The company has said it’s in talks with the department to regain access to the funds to restart plans to build vehicles at a former GM factory in Wilmington, Delaware.
Bright Automotive Inc., a Rochester Hills, Michigan-based company that hoped to make electric vans, said in February it was closing down after failing to receive an ATVM loan.
Aptera Motors Inc., a California electric-car company supported by Representative Darrell Issa, chairman of the U.S. House committee leading a probe of the department’s loan programs, closed in December after it couldn’t get private financing to match a $150 million conditional loan commitment from the Energy Department.
Chrysler Group LLC withdrew its loan application in February.
Tesla, based in Palo Alto, California, fell 2.2 percent to $32.25 at the close yesterday in New York. The shares have gained 13 percent this year.
To contact the editor responsible for this story: Jamie Butters at email@example.com