| The tweet was true: As indicated on Tuesday, Tesla paid off its DOE loan on Wednesday. Nine years before the note was due, Tesla "wired $451.8 million to repay the full loan with interest," as Reuters says. The Obama administration has been massively criticized for its largesse towards Fisker Automotive, A123,and Solyndra. Both A123 and Solyndra filed for bankruptcy, Fisker is teetering on bankruptcy. The DOE is understandably effusive over the repatriated money, and Tesla. Said U.S. Energy Secretary Ernest Moniz.
Moniz said more than 90 percent of the loan loss reserve Congress established remains intact, while losses represent about 2 percent of the overall $34 billion portfolio. It's not that Tesla suddenly made half a billion dollars to repay rich uncle Sam. Tesla used money from a $968 million stock and note sale that closed Wednesday to repay the debt. The TSLA stock has been on fire lately, Tesla has a higher market cap that Fiat, and it probably was a good time to issue more. Executives of major automakers roll their eyes when Elon Musk talks about disrupting their business. Boutique makers of $100,000 cars sometimes do OK during an uptick of the economy, only to get wiped out when the economy goes sour and corrodes disposable income. The big challenge comes when boutiques enter the mass market and find themselves confronted with many billions of investments in R&D, plants, and marketing which won't show profits for decades. Tesla has for all intents and purposes what little market there is for itself, especially after large OEMs cooled on the idea of EVs. Should EVs ever become a viable market, major OEMs can dust off their digital blueprints, slap an updated body on it, and disrupt the dreams of Tesla. from The Truth About Cars http://www.thetruthaboutcars.com | |||
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