Tesla Motors Repays $465M Government Loan 9 Years Early

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Tesla Motors Repays $465M Government Loan 9 Years Early

Posted by Soulskill on Wednesday May 22, 2013 @10:26AM from the electric-money dept.

Tesla Motors announced today it has completely repaid the $465 million loan from the U.S. Department of Energy the company received in 2010. The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars. The stock price had risen sharply after the company reported its first profitable quarter (and the stock still sits roughly 50% higher than before their earnings release). Today's payment of $451.8 million finished off both the loan's principal and its interest, nine years before the final payment was due. Tesla CEO Elon Musk 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.'

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It's about time! by Anonymous Coward · 2013-05-22 10:32 · Score: 4, Funny

Finally!
1. Re:It's about time! by LocalH · 2013-05-22 10:35 · Score: 4, Insightful
  
  And yet the thanks they get is the state of North Carolina (and probably others too, but NC is the one I've heard about recently) shitting all over them because they want to sell their vehicles directly to people instead of having to go through "third-party dealers".
  
  --
  FC Closer
2. Re:It's about time! by Fluffeh · 2013-05-22 11:04 · Score: 5, Insightful
  
  In Australia, we call it Tall Poppy Syndrome where someone that is doing outstanding work is seen as a threat, a target and something to be cut back down to size. Though in this case, I would say that there is a hint of Schadenfreude thrown into the mix as well.
  Basically, it's just sad and pathetic.
  
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  Moved to http://soylentnews.org/. You are invited to join us too!
3. Re:It's about time! by sgt+scrub · 2013-05-22 11:29 · Score: 4, Informative
  
  Texas is working on banning them too. I wonder if other companies that received loans are running into walls created by state and local governments with republican majorities.
  
  --
  Having to work for a living is the root of all evil.
4. Re:It's about time! by Anonymous Coward · 2013-05-22 11:43 · Score: 5, Interesting
  
  It's also very much political. Elon Musk's and Tesla's success under this loan program means that it was a Good Idea, and the Republicans don't want ANYTHING that President Obama or the Democrats have been involved in to be considered a success. They want all these loans to fail as proof that Keynesian economics is flawed, that the very idea of the government loaning money to renewable energy ventures (rather than their own buddies, Big Oil) is doomed to failure.
  The GOP is so out of their minds with insane rage that they would do anything to ensure that no progress is made under a Democratic administration, even if it means Americans have to suffer a prolonged recovery. They want the sole credit. They also want to make everyone forget that it was their own policies of deregulation that caused the economy to tank in the first place, so that their buddies on Wall Street can make even more money without being held accountable. The only kind of capitalism that these assholes want is the kind that makes THEM richer. That means pumping more oil, for one.
5. Re:It's about time! by ChrisMaple · 2013-05-22 11:47 · Score: 5, Insightful
  
  Dealers are a huge lobby and major contributors in all states. This is a clear case of entrenched influence against the public interest, in opposition to individual rights.
  
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  Contribute to civilization: ari.aynrand.org/donate
6. Re:It's about time! by djrobxx · 2013-05-22 12:01 · Score: 4, Informative
  
  Did Tesla have to pay a penalty for early repayment? You know, like banks will do if you want to pay a mortgage off early. Or is it a different set of rules?
  Most normal home mortgages do not have a pre-payment penalty.
7. Re:It's about time! by Lumpy · 2013-05-22 12:11 · Score: 2
  
  They need to run ad's in NC stating that everyone that has a NC home address can buy a Tesla out of state and Tesla will pay the sales tax.
  Tesla can flip a giant F-U to NC, and they really need to.
  
  --
  Do not look at laser with remaining good eye.
8. Re:It's about time! by Lumpy · 2013-05-22 12:13 · Score: 5, Informative
  
  If your mortgage has a early repayment penalty then you got screwed hard. The only time I have sever seen that is when someone had no idea at all what they were doing and said yes to everything the banker asked.
  Let me guess you also paid "points" as well. Intrest rates have been so low that paying $1000 in points to lower it by 0.01% is worthless unless you are buying a 2.5million mansion.
  
  --
  Do not look at laser with remaining good eye.
9. Re:It's about time! by MichaelSmith · 2013-05-22 12:21 · Score: 2
  
  Its a sign of things to come for the economy though. If electric cars take over the market, the demand for car maintenance will collapse. Thats a big chunk of the job market in some areas and there will have to be some adjustment.
  
  --
  http://michaelsmith.id.au
10. Re:It's about time! by R3d+M3rcury · 2013-05-22 12:39 · Score: 3, Insightful
  
  I'd leave partisanship out of it--I'm pretty sure it's more about money from car dealers both via campaign contributions and taxes.
  Think of it this way--that car lot takes up a lot property. Property gets taxed at a local level. There were a bunch of localities that had problems when their Pontiac and Saturn dealerships closed down. People start buying cars over the Internet and not through local dealers, there goes those dealers and their local taxes. I'm sure there are plenty of cities who'd rather not see that happen.
11. Re:It's about time! by DarkTempes · 2013-05-22 12:50 · Score: 3, Interesting
  
  The Government is not in the money making business. Comparing taxpayers to bank shareholders is dumb in this instance.
  
  The return on investment in this case is (potentially) getting a new successful industry at very little cost to the tax payer.
12. Re:It's about time! by Anonymous Coward · 2013-05-22 13:02 · Score: 4, Insightful
  
  Your post is incorrect. Speaking as a blatant republican and businessman, I don't want the U.S. to invest in loan guarantees for fly by night operations that have absolutely no chance of success. Elon Musk, who successfully founded Paypal, knows how to run a company, had a real business plan and had a legitimate chance to make a long term profit was worthy of a federal loan guarantee. Solyndra is what we are trying to prevent.
  BTW - good work rewriting history - lax lending standards / pushing acceptance of sub-prime loans that caused the housing crisis and recession were not caused by republicans. This shouldn't be a news flash...
13. Re:It's about time! by dog77 · 2013-05-22 13:02 · Score: 5, Informative
  
  Oddly enough the loan program was established under the Bush administration.
  
  From wikipedia article: http://en.wikipedia.org/wiki/Tesla_Motors http://www.drivingtoday.com/news_this_week/2009-07-17-4337-driving/index.html#axzz2U4akRe2c
  
  The low-interest loans are not related to the "bailout" funds that GM and Chrysler have received, nor are they related to the 2009 economic stimulus package. The Department of Energy loan program was created in 2007 during the George Bush administration in order to get more fuel-efficient vehicle options to U.S. consumers and to decrease the country's dependence on foreign oil.
14. Re:It's about time! by Anonymous Coward · 2013-05-22 13:16 · Score: 3, Insightful
  
  And the fact you were voted 5 interesting for being a bigot shows how absolutly worthless /. comments are.
  Now for the deregulation TRUTH how it was the DNC that refuesed to let Bush add regulations to prevent the collapse. But then again the truth doesn't ever seem to line up with DNC talking points, so keep spewing your bigioted BS lies.
15. Re:It's about time! by Anonymous Coward · 2013-05-22 13:55 · Score: 3, Insightful
  
  but if the government is loaning out taxpayer money without adequate return on investment, the taxpayers should be pissed off as much as a bank's shareholders would be.
  The government is not a company. It does not need to make a direct return to do a good thing. Consider the government spending $100 million for a bridge. Say the bridge creates $200 million in economic activity by joining communities. If the government taxes at 40% they will only get $80 million back. Does that mean it was a bad investment? That doesn't mean the government spends money on anything. How is anyone really anti-government. I know of no alternative system. I propose a real discussion about what government should be used for instead of making the ridiculous assertion that the government needs to somehow make a profit.
16. Re:It's about time! by mattack2 · 2013-05-22 14:06 · Score: 4, Interesting
  
  I don't want the government to lose money either, but investing in clean tech, with possibility of failure, seems better to me than investing in oil companies or subsidizing corn syrup.
  Yes, I would rather get rid of ALL subsidies, but unfortunately I don't think that's going to happen.
17. Re:It's about time! by alexander_686 · 2013-05-22 14:07 · Score: 3, Insightful
  
  Even without a penalty the US Treasury will make money. They get the principal back – just less interest.
  Most corp bonds issued that have a call feature in them (i.e. a early repay feature) has a penalty. Normally 1 to 2 percent in the early life of the loan, but steadily decreasing.
  Here is an example. A company issues a 10 year bond at 10%. 3 years latter the interest rate is 5%. They call back the high interest rate bonds and issue new ones at 5%. This is bad for the bond holder because instead of having a 10% bond they now have cash. If they went ahead and replaced it they would only get 5%. In order to stop that, the company usually has to call the bond at 102. - that is for every $100 they need to pay $102.
  I doubt the US Treasury would have put a penalty for an early call – but I am just guessing.
18. Re:It's about time! by PopeRatzo · 2013-05-22 14:10 · Score: 5, Insightful
  
  Did Tesla have to pay a penalty for early repayment?
  Early repayment penalties are illegal in most of the US.
  The benefit of this kind of loan program is not in the interest earned, but in the fact that you get a successful company that creates jobs and pays taxes, which used to be considered a good thing. Having an additional player in a heavy industry also creates competition in a fairly consolidated sector, which also used to be considered a good thing.
  These kind of government loans to business in the US go back to the 18th century, and were considered a very good idea until recently, when one of the two political parties lost its mind.
  
  --
  You are welcome on my lawn.
19. Re:It's about time! by dywolf · 2013-05-22 14:10 · Score: 2
  
  yes it was ALL THE REPUBLICANS.
  Except...the program was established by Bush.
  And the DOE overseeing it is largely apolitical, neither right nor left.
  so your statements tell us more about your own bias and mental filters, than it does about the actual story.
  
  --
  The guy who said the election was rigged won the presidency with the second-most votes.
20. Re:It's about time! by PopeRatzo · 2013-05-22 14:13 · Score: 5, Informative
  
  There's a good risk of loss in many cases (see the history!)
  Taken as a whole, government investments like have very rarely lost. Even in the contentious past 5 years, the government investment in emerging technologies have been very profitable, even with the poster boys like Solyndra which are used to argue that all government investment in technology is a bad idea. This argument is usually made on the Internet, which is more than a little bit ironic.
  
  --
  You are welcome on my lawn.
21. Re:It's about time! by WaywardGeek · 2013-05-22 14:30 · Score: 4, Insightful
  
  Speaking as a blatant democrat and businessman, I agree with your first paragraph. Tesla had a good chance. I cheered the decision to extend the government backed loan. They'd already produced the most successful electric car in my lifetime, losing not too much money in the process, while developing core competencies - the drive train and battery packs. The basic principle that government should invest where there is a track record of success falls on deaf ears in Washington. Companies like Fisker did not meet this threshold, and Solyndra was essentially an idea on paper, worth more research, but not a half billion dollars. I think a 1 in 3 success rate is about the best we could expect from government investments, regardless of the party in charge. No VCs I know of have a 1 in 3 success rate. Still... Fisker was a doomed investment. I was pissed when I heard of it. I'm just glad we never gave them the second half of the money.
  As for the second part, yes democrats pushed for bad loans, but unregulated banks got unregulated insurance on unregulated derivatives, while everyone knew that they were all too big to fail. That lack of regulation on businesses that the government will give a trillion dollars to before allowing to fail is the GOP's fault. There's blame to go around, and that's not rewriting history. Still, good post overall.
  
  --
  Celebrate failure, and then learn from it - Nolan Bushnell
22. Re:It's about time! by riverat1 · 2013-05-22 14:35 · Score: 5, Insightful
  
  If local bookstores and video stores had the same amount of political clout as auto dealers then Amazon and NetFlix wouldn't be able to sell in those states either.
23. Re:It's about time! by Wild_dog! · 2013-05-22 15:11 · Score: 2
  
  Wish I had mod points.....
  +1 for being succinct and absolutely correct
24. Re:It's about time! by Wild_dog! · 2013-05-22 15:14 · Score: 2, Interesting
  
  Funny how the coffers of Social Security are "still bleeding" and yet they have a greater than 2 trillion surplus in T-bills. Pretty good for a pay-as-you go system. Funny how SS has been going bankrupt for the last 70+ year.
25. Re:It's about time! by Virtucon · 2013-05-22 16:28 · Score: 3, Insightful
  
  Well you're forgetting the revenue side of things from dealers. Not that Tesla couldn't do the same thing up to a point.
  Car Sales generate very lucrative sales taxes as well as vehicle registration fees etc. Dealerships must have licenses and in some states, state approval to operate (read: $$$ in the state coffers)
  Dealers make heavy investments in their franchise, meaning that they'll employ workers and have a presence that also generates lots of sales tax revenue from parts/maintenance and resale.
  Most states also want a local "neck to wring" when it comes to things like lemon laws. If they're dealing with an out of state provider, it complicates their remediation process. Not that it's not impossible to enforce their laws on somebody selling something in state (uh, Internet Sales Taxes anyone?)
  But the cronyism that exists and has existed because car dealers contribute to political campaigns and get nice laws passed to prohibit competition.
  It's all about money and influence and like the Taxi Apps for example fighing DC and NYC to allow folks to order a cab their way or AirBnb for example running afoul with NYC, it goes to show how much red tape and regulation there is in our world.
  So, yes Car Dealerships are a huge
  
  --
  Harrison's Postulate - "For every action there is an equal and opposite criticism"
26. Re:It's about time! by Jeremi · 2013-05-22 18:05 · Score: 5, Insightful
  
  If electric cars take over the market, the demand for car maintenance will collapse. Thats a big chunk of the job market in some areas and there will have to be some adjustment.
  We should all have such problems. Also if they find the cure for cancer, a lot of oncologists will be out of a job. It's still a big net win for society in either case.
  
  --
  
  I don't care if it's 90,000 hectares. That lake was not my doing.
27. Re:It's about time! by MichaelSmith · 2013-05-22 18:15 · Score: 2
  
  If electric cars take over the market, the demand for car maintenance will collapse. Thats a big chunk of the job market in some areas and there will have to be some adjustment.
  We should all have such problems. Also if they find the cure for cancer, a lot of oncologists will be out of a job. It's still a big net win for society in either case.
  Thats right but mechanics will still complain and vote for measures to preserve the status quo.
  
  --
  http://michaelsmith.id.au
28. Re:It's about time! by MichaelSmith · 2013-05-22 19:58 · Score: 3, Informative
  
  I have read elsewhere that servicing the Model S means topping up the wiper fluid and rotating the tyres. Braking is done mostly with the driveline. Suspension generally lasts the life of a car these days. Electric motors are super reliable. Single speed gearboxes are reliable, like a differential gear. You basically build it and never touch it again.
  
  --
  http://michaelsmith.id.au
29. Re:It's about time! by rioki · 2013-05-23 00:28 · Score: 2
  
  This is what you normally call marketing. So far the cars are not so long in the field to really know.
30. Re:It's about time! by smooth+wombat · 2013-05-23 00:49 · Score: 2
  
  I don't want the U.S. to invest in loan guarantees for fly by night operations that have absolutely no chance of success.
  
  So like Goldman Sachs, AIG, Wells Fargo, Bank of America et al?
  
  --
  We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Congratulations! by tnk1 · 2013-05-22 10:34 · Score: 4, Funny

Good job!
So, when do they start making a car that I can afford to drive?
1. Re: Congratulations! by Anonymous Coward · 2013-05-22 10:40 · Score: 3, Insightful
  
  The Tesla S is very affordable to drive. Many cents less per mile than a gasoline car.
  Your problem is purchasing, not paying for the electricity.
2. Re: Congratulations! by tnk1 · 2013-05-22 10:46 · Score: 5, Insightful
  
  Except for the cars that I have stolen, I factor in purchase price with operating costs when I determine whether I can afford to drive that vehicle.
3. Re:Congratulations! by multiben · 2013-05-22 10:53 · Score: 2
  
  Is that comment for real???! It also happens to help if you're one of the most successful and insightful businessmen walking the planet regardless of where you come from.
4. Re: Congratulations! by immaterial · 2013-05-22 11:01 · Score: 2
  
  What, is North Carolina stopping us from stealing Teslas now too?
5. Re: Congratulations! by Mitchell314 · 2013-05-22 11:06 · Score: 4, Funny
  
  Some people are bald, you insensitive clod.
  
  --
  I read TFA and all I got was this lousy cookie
6. Re:Congratulations! by Mystakaphoros · 2013-05-22 11:07 · Score: 2
  
  It helps if you're a minority like Elon Musk (African-American).
  Is that comment for real???! It also happens to help if you're one of the most successful and insightful businessmen walking the planet regardless of where you come from.
  (South) African-American. No racism here, though perhaps a little bit of where-in-the-world-is-your-accent-actually-from -ism.
7. Re:Congratulations! by tnk1 · 2013-05-22 11:12 · Score: 4, Informative
  
  Actually, that comment was sort of amusing because, while Musk is actually African, he's about as white as I am.
8. Re:Congratulations! by GreatDrok · 2013-05-22 11:26 · Score: 2
  
  "Good job!
  So, when do they start making a car that I can afford to drive?"
  You can afford to drive it - the cost of electricity per mile is far lower than the cost of petrol for the same distance. Your problem is you can't afford to *BUY* it. The good news is, those who can afford it are allowing the cost to come down as a result of mass production so the early adopters with deep pockets are subsidising the eventual more affordable versions for the rest of us.
  My main problem with electric cars isn't the fuelling (yada yada, moving the pollution etc) but rather the guy in front. Queuing in a traffic jam is still a massive waste of time regardless of means of propulsion. Electric cars don't fix this. You need to get out of the whole concept of everyone having their own personal box on wheels and find more efficient means of moving people from A to B. The car isn't it and is a victim of its own success.
  
  --
  "I have the attention span of a strobe lit goldfish, please get to the point quickly!"
9. Re: Congratulations! by tftp · 2013-05-22 13:57 · Score: 2
  A gasoline-powered car isn't economical. You just don't notice the money flowing out of your wallet at the gas-station, or the doctor's office, or the tax receipt.
  The "pay as you go" is a very valuable concept. Take a common man and offer him two choices:
  
  * a new car for $10K and $1K in gas fees every year for 20 years
  
  * a new car for $30K and no fuel fees for 30 years
  
  The common man will pick the first option. Why?
  To begin with, his WAF will not allow him to buy a car for $30K, regardless of how cheap it will be to run. He may simply not have the money. He may be able to take credit. But credits cost even more.
  A car is an outdoor animal who moves at high rate of speed among other cars. It can become damaged and totaled. The chance of that, for most drivers, is not that great - but I know people who went through that. Probably we all do. Some may know it firsthand. Loss of an expensive car is final, and it does not allow you to recoup the premium that you paid up front.
  Even if you have money, an expensive purchase locks up the money that you could have invested and obtained interest on. This money has to be counted against the value of the car. When you buy gasoline for your standard car you are "locking up" only $20-$50, and only for a week or two. That is OK. But if you lock up a $20K over even ten years, that's something you cannot dismiss.
  A standard car uses a well understood technology. You know pretty well how long the engine will last, on average, or the transmission, or the brakes, or the battery. You can manage these expenses by allocating money for future expenses - perhaps by buying extended warranty, perhaps by just setting money aside. It is difficult to do with an EV because no statistics are available. Whatever statistics are available, they are not always favorable.
  In that aspect a gasoline car is also far more predictable. You may not leave the town for ten years straight, but one day your dying aunt wants to see you one last time and include you into her will. You jump into the car and drive for 500 miles non-stop, except fuel, and arrive by the end of the day. An EV is not capable of this trick whatever you do. Rentals are awfully expensive.
  Even if all of the above is not applicable to your case, you still have to pay up front for decades of driving. What if your income changes? What if you want to save on fuel? You can do that with a standard car by just driving less, and taking the bus more. You cannot do that with an EV because you *already* paid the gas fees when you bought the car. You cannot fine-tune your expenses to your changed circumstances.
  So when you compare the two options you *naturally* choose one that costs less up front, does more, is more reliable and predictable. In return you will be paying more for gas, on a "pay as you go" basis. This is a familiar - and, apparently, comfortable - situation, because most personal cars in the USA are either bought with a loan, or leased. People are reluctant to pay a lot in one lump sum; they are much happier to pay smaller amounts in installments. (If that weren't true, nobody would need credit.)
  I perfectly understand that Tesla has a [luxury] market. It is not the market for everyone, where a steel mill worker (assuming there is one left in the USA) could walk into the dealership (well, into a Tesla Store, I guess...) and order a Tesla car for his family use. I also understand that they are doing whatever they can. It's a harsh world, and Fisker's fiery demise is not making Tesla people too happy.
  All I want to say is that Tesla will not get anywhere until they have a model for the mass market. They will remain a curiosity car maker for a few rich people, but they will not grow. Small market, especially the luxury market, is a dangerous place to be. It may take just one bad accident where the hardware is at fault to lose your reputation - and your sales.
10. Re:Congratulations! by jrumney · 2013-05-22 14:06 · Score: 3, Funny
  
  Being able to work 730am-4:30am will eliminate the traffic jam effects on you.
  I tried that, but I find that the 2 hours of sleep per night (after the 30 minute commute each way) has worse effects on me than the one hour commute each way if I work a regular 9-5.
11. Re:Congratulations! by quantaman · 2013-05-22 15:09 · Score: 4, Funny
  
  Hey - we don't know if he is a guy. Her could be a girl. Or a dog. Or a AI. Who knows?
  tnk1 is a guy's name.
  
  --
  I stole this Sig
12. Re: Congratulations! by swillden · 2013-05-22 17:59 · Score: 5, Informative
  
  Anyone who wants to pay $30K for a car is not going to be too concerned about gas costs.
  I am, and gas costs made me decide to pay $30K for my Nissan LEAF.
  I analyzed TCO (excluding maintenance costs, which are much lower for electrics, but I couldn't quantify that so I just ignored it) for about 20 different vehicles, including EVs, hybrids and pure ICE vehicles,. My model assumed that the new vehicle was going to be an additional vehicle, and that the other (gas-burning) vehicle would be available for trips beyond the range of the EV. I assumed very conservative ranges for the EVs, for example I estimated the LEAF's range at 60 miles (it's really more like 80-120, depending on conditions). Finally, I created a statistical model of my driving habits and calculated the total cost over 8 years.
  The result was that the three EVs I looked at had the top three spots... they were the cheapest to drive overall, in spite of being by far the most expensive up front. Even better, thanks to tax credits the break-even point was at 2-3 years. Without the tax credits it was about 6 years. The vehicle immediately behind the EVs was the 18K Honda Insight hybrid, then a mix of other hybrids and more-efficient gas vehicles and finally a long tail of gas vehicles trailing the pack.
  Of course, your driving patterns may be different, your electricity costs may be higher or gas prices lower (oh, I assumed that gas prices would continue increasing at the same rate they've increased over the last 8 years), etc., etc, etc., but I've walked several other people through applying my model to their situations and in every single case the EVs have been extremely competitive -- and usually the very cheapest.
  In practice, what I've found -- for me -- is that my model was very conservative. In fact, the LEAF is even cheaper than I expected. Partly that's because I was able to get a better deal on the car than I had assumed, and partly it's because I do most of my charging at work, so my actual energy costs are dramatically lower than my model had anticipated.
  Oh, and it's a very nice car, not a "tin can" that can't keep me as warm or cool as I like. It's a 3000-pound vehicle that accelerates 0-60 in 7.8 seconds, will do 90+ mph and can easily keep the cab at 60 degrees or 90 degrees or anywhere in between, regardless of outside temperature. It also has power everything, a nice stereo, GPS navigation, XM radio, bluetooth, backup camera, and computer or smartphone-based remote control... it's loaded. Of course, stomping on the gas pedal, driving 90 mph and blasting the heat (the AC doesn't use so much, plus it doesn't have to work against the heat generated by an ICE) will drop my range from 120 miles down to about 70 -- but my model only assumed a 60 mile range. It's a compact, but the alternatives I compared it against were also compacts.
  EVs are very real, and very practical, today. And it's only going to get better. If Tesla can produce a $30K car with a 200-mile range, it'll be a huge hit with cost-conscious people, because that's enough range that for most people it can be a primary car -- no need for another ICE vehicle except on the rare long-distance trips, and it's cost-effective to rent for those.
  
  --
  Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
No, no by Intrepid+imaginaut · 2013-05-22 10:35 · Score: 4, Funny

Electric cars will lead to nipples and other unamerican things.
1. Re:No, no by girlintraining · 2013-05-22 10:55 · Score: 4, Insightful
  
  Electric cars will lead to nipples and other unamerican things.
  ... Like paying back your government loans instead of yelling "Too big to fail! ahahahaaha..." and running to some tropical island to take daily wealth showers and drink out of gold-lined cups. :/ They should be commended... it's a decidedly unamerican approach to business. Fiscal responsibility? It's like an F-word in Congress.
  
  --
  #fuckbeta #iamslashdot #dicemustdie
Nice. by Nemyst · 2013-05-22 10:35 · Score: 4, Insightful

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.

Bravo to Tesla, and let's hope the current trend continues. The US really could use some new blood in the automotive industry.
1. Re:Nice. by GodfatherofSoul · 2013-05-22 10:37 · Score: 3, Insightful
  
  And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.
  
  --
  I swear to God...I swear to God! That is NOT how you treat your human!
2. Re:Nice. by morcego · 2013-05-22 10:59 · Score: 4, Informative
  
  And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.
  I'm not sure if you are reporting the fact, or complaining about it. If you are just reporting it to provide accurate information, kudos for you. Not only are you are well informed, you have more common sense than most people I know (or know of), and please stop reading here :).
  I'm forced, however, to remember anyone who complains about "subsidy battles" that the USA is huge on subsides, and wages this battle against many countries, several times winning it. Orange/orange juice and corn are quick examples.
  Unfortunately, subsidies are a necessary evil, specially since they are, many times, not a tool to fight an external competitor, but to regulate the internal market. In this, no country is blameless.
  
  --
  morcego
3. Re:Nice. by Jah-Wren+Ryel · 2013-05-22 11:00 · Score: 5, Insightful
  
  I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.
  In fact, of the 23 companies that received funding under the same program as Solyndra did, at least 19 of them are still in business - that's an 83% success rate. When you factor in the fact that these were all loans that the free-market was too risk averse to take on itself, that number is pretty fantastic. Most venture capital funds are lucky to have a 10% success rate.
  
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4. Re:Nice. by ShanghaiBill · 2013-05-22 11:02 · Score: 2, Insightful
  
  And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.
  And we lost that battle because we were subsidizing a company using the wrong technology. Governments are terrible at "picking winners" and even worse at cutting their losses rather than shoveling good money after bad. If Solyndra had a good chance of success, they would have been able to attract private funding, and wouldn't have been asking for taxpayer money in the first place. Subsidizing basic R&D often makes sense. Subsidizing manufacturing does not.
5. Re:Nice. by Anonymous Coward · 2013-05-22 11:02 · Score: 2, Insightful
  
  They aren't all going to be winners. Investment has some risk associated with it.
  Tesla is a good example of a winner. Not only are they repaying their loan early, they've developed technology that electric drive vehicles use.
  Everyone benefits (Tesla makes money, we get electric cars, the planet gets more efficient vehicles) , and it's because the government was willing to put money up where risk-averse private companies failed to do so.
6. Re:Nice. by sneakyimp · 2013-05-22 11:15 · Score: 4, Insightful
  
  Maybe this is because the oil industry evolved from the same people who ran the cattle industry, where a man's word was his bond and multi-million dollar deals were made on a handshake. Integrity was everything, and if you lost that, you simply weren't in the business anymore.
  Oh GAWD please stop with the cheesy platitudes and the pining away for older, ostensibly better times. That is such a tired trope. Surely you recognize that this is a ludicrous and unprovable statement based on no evidence whatsoever?
  
  Government (and "free governemtn money") corrupts pretty much everything absolutely...
  And surely you recognize that this is a contradiction of your previous statement? The oil industry enjoys enormous tax breaks and subsidies. Are those billions in subidies not government money? Is the oil industry somehow immune to corruption because of its mythical birth among cattle barons?
7. Re:Nice. by Alomex · 2013-05-22 11:21 · Score: 4, Interesting
  
  Governments are terrible at "picking winners
  [citation needed]
  DOE funds had a better rate of return than Mitt Romney's investment fund as per widely reported figures during the election.
8. Re:Nice. by ShanghaiBill · 2013-05-22 12:02 · Score: 4, Insightful
  
  DOE funds had a better rate of return than Mitt Romney's investment fund as per widely reported figures during the election.
  Wrong. The DOE funds had a lower bankruptcy rate (8% vs 22%). That is NOT the same as a better rate of return. The government gives a loan, and loses it if the company goes bankrupt, and basically gets its money back if the company is successful. A private equity firm likewise loses its investment if the company goes bankrupt. But if the company is successful, a private equity firm can make many times its initial investment. Because of this asymmetry, PEs taking an equity stake, should and do make high risk investments than a lender would not. So the higher bankruptcy rate is expected. But the overall rate of return is still higher.
9. Re:Nice. by ATMAvatar · 2013-05-22 12:08 · Score: 2
  
  It largely depends on what you consider failure. WSJ cites that if you base success on breaking-even, 95% of start-ups fail, but if you base it on businesses failing so badly that investors are left with nothing at all, then it's closer to 30-40%.
  
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10. Re:Nice. by sneakyimp · 2013-05-22 13:12 · Score: 2
  
  Did *you* read the article I linked? I'm not sure what part of $4.5B you don't understand. Surely I deserve some credit for not using some left-wing-nutjob link like this one which chalks it up at $52B. To subsidize an industry that is comprised of the largest companies in the world pulling down profit margins as high as 12.5% in a given quarter (Exxon June 30, 2012) doesn't make any sense at all. To give tax breaks to these enormous (and enormously profitable companies) is really stupid. Please explain to me how heating energy gifts to the poor is not a subsidy that benefits energy companies? Apparently facts, such as this one, don't matter to you either:
  
  Exxon's income tax rate is below the 35% rate mandated by corporate tax law
  That is also from a fairly balanced article.
  
  Falling for leftist catchphrases unexamined? Deliberately distorting the facts? I don't know what your problem is, but you're not getting away with it this time.
  ChrisMaple (or whatever your real name is), to put an end to my villainous catchphrasing, surely you can save the day by finding some facts to back up the "fact" stated by dublin that "the oil industry evolved from the same people who ran the cattle industry, where a man's word was his bond and multi-million dollar deals were made on a handshake?" No? Well how about evidence that "Government (and 'free governemtn money') corrupts pretty much everything absolutely" and yet the oil industry is not corrupted by government money? How about identifying any "deliberately distorted facts" in my prior post (or this one)? You'll definitely need to do something like that, because calling me a moron is certainly not going to hamper me at all.
11. Re:Nice. by Ksevio · 2013-05-22 15:14 · Score: 2, Informative
  
  Taxes aren't stealing - they're part of an agreement you've made with the government by continuing to live in the country.
  
  In Solyndra's case the tax money was used to invest in a superior type of solar panel technology that ultimately turned out to cost more than the heavily subsidized Chinese solar panels. I guess the government could just stick to blowing people up, but I'd much rather prefer all the new technology and progress.
12. Re:Nice. by mvdwege · 2013-05-22 19:05 · Score: 2
  
  Anyone using the tired 'gunpoint' meme should be modded into oblivion. Preferably with a new category '-1, Complete Tool'.
  
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Re:Electric cars are just not going to take off... by Anonymous Coward · 2013-05-22 11:02 · Score: 5, Insightful

This is exactly what the horse and buggy industry said when the first cars came on the road. "Ha! Petrol! Where do they think they will get it, once on the road?" and "People already have horses - who's going to want to buy an automobile when the buggy is so much cheaper??"
That's pretty cool by 50000BTU_barbecue · 2013-05-22 11:02 · Score: 2

I'd like an electric car. The one thing about living in Quebec is relatively affordable hydroelectricity. However I wonder how an electric car will fare in winter when 33% of the battery will go to heating. At least that's the number they mentionned for the electric buses they're trying in Laval, you have to almost cut the summer range in half for winter. The motors work harder too to cut across snow.

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1. Re:That's pretty cool by kenaaker · 2013-05-22 11:15 · Score: 5, Informative
  
  I leased a Focus Electric and drove it through about half of this winter in Minnesota. I initially was only going to drive it through the easy months, but this winter gave me examples of almost every sort of ugly possibility.
  The car did well enough through all the ugliness that I'm going to use it year round. The range did drop off dramatically on the days when it was about 0 (F). But my commute is only 7 miles, so there was really no problem with using it for getting to work. The other thing that helped was that the car could be warmed up while it was still plugged in. I was also going to get a stage 2 charger installed, but with my typical daily use, the car is fully charged off 110 after midnight. I don't think I'll get a stage 2 charger until I get a second electric.
2. Re:That's pretty cool by s122604 · 2013-05-22 11:46 · Score: 3, Interesting
  
  I've always thought what they could do is incorporate a small, propane powered generator, like say around 2.0KW. To get an estimate of the size, honda makes a 2kw one that is about the size of a small suitcase, and weighs around 50lbs.
  
  Maybe make it a modular add-in that you can take in and out of the trunk. The generator is way too small to actively power the car, but it could be ran so that the heat of the motor could be used to warm the cabin (like all gas vehicles do today) when it is extremely cold. The electricity it provided would extend range much, but it would keep you out of resistive heat, which is a real waster.. It would also provide a means of emergency charging for a stranded vehicle
  
  I'd make it propane, because in a quality tank, the stuff lasts virtually forever, and it burns really clean.
Quite the contrary! by goruka · 2013-05-22 11:06 · Score: 4, Informative

I think history has proven this again and again I believe that the technology for electric cars for everyone is not quite there yet, so focusing on the luxury market segment they can generate enough demand to have the possibility to actually work on this technology and, eventually, drive the prices down.
It's the same thing that happened with smartphones and other technologies, once the acutal product is there and proves to be profitable, technology advances much more strongly in that direction, helping to drive prices down and get more customers and markets.
Re:Electric cars are just not going to take off... by voidptr · 2013-05-22 11:19 · Score: 4, Informative

The Model S is comparable in purchase price to an otherwise equivalent gas-powered car. It's a large, high performance luxury sedan, and other cars of that size, horsepower, and trim level run $75 - $100k as well.

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Re:Maybe they missed the point of the loan... by turp182 · 2013-05-22 11:29 · Score: 2

Maybe, but it's conservative spending and accounting that allow for such early payments.
I appreciated the bullet points, and the government shouldn't be worried about future interest payments if it receives the provided capital ahead of schedule. At least they got paid back.

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Re:Electric cars are just not going to take off... by mark-t · 2013-05-22 11:33 · Score: 2

Indeed... and it wasn't until the price actually *DID* come down that people really started buying them in any quantity.

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From the Archives by gencha · 2013-05-22 11:33 · Score: 5, Interesting

In case anyone wants to read some of those "insightful comments" from 2010: http://news.slashdot.org/story/09/06/24/1947208/Tesla-Nabs-465M-Government-Loan-To-Build-Model-S
Re:Maybe they missed the point of the loan... by Teancum · 2013-05-22 11:35 · Score: 4, Interesting

Tesla doesn't seem to be having much of a problem in terms of market penetration because their factory has barely been able to keep up with the people willing to simply purchase them over the internet or through convoluted sales venues that make the customers travel across several states or even from other countries and continents in order to make a purchase. Only recently has the delay from making a purchase to getting delivery even approached the logistical limits of the Tesla supply chain rather than dealing with the customer backlog and even paying other customers to "move to the front of the line" to get the delivery earlier.
Simply put, if Tesla is charging what the market can bear on their product, they are simply practicing capitalism... something I didn't think was a crime in America.
As for the government missing out on interest income, I think they are going to more than make up for that loss through corporate income taxes and taxes on the wages of the Tesla employees.... and federal excise taxes on the vehicles themselves. It might be in some weird theory a slight loss to the government, but not much. What it really did was give Tesla some short-term operating capital that allowed the company to be able to hire the employees at the old NUMMI plant at a time when they weren't selling cars.
Texas, North Carolina Fighting Tesla's Dist Model by Radtastic · 2013-05-22 11:35 · Score: 4, Insightful

Texas also has pushed back on the manufacturer-direct model

http://money.cnn.com/2013/05/20/autos/telsa-car-dealers/index.html

I especially take offense with this argument:

"When manufacturers discontinue a brand -- such as Pontiac, Mercury, Oldsmobile or Saturn -- auto dealers still remain to help the customer,"
In reality, if Tesla were to go out of business, individual mechanics would open shop assuming there was a business demand. If there wasn't any demand, then it wouldn't matter if the sale originally involved a dealer or not. (Unless said former-dealer was unclear on the concept of business.)

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They're still deeply in hock by DerekLyons · 2013-05-22 12:02 · Score: 2

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.
Keep in mind they didn't repay the loan out of revenue - they refinanced. (I.E. they sold bonds to repay the government loan.)

Bravo to Tesla, and let's hope the current trend continues.
Let's not count our chickens before they're hatched - Tesla is still saddled with over half a billion dollars in debt from this bond issue alone, and not so much currently in the way of income to cover that debt. They're a very long way from being in the black.
Re:Texas, North Carolina Fighting Tesla's Dist Mod by Spoke · 2013-05-22 12:12 · Score: 3, Interesting

I especially take offense with this argument:

"When manufacturers discontinue a brand -- such as Pontiac, Mercury, Oldsmobile or Saturn -- auto dealers still remain to help the customer,"
In reality, if Tesla were to go out of business, individual mechanics would open shop assuming there was a business demand. If there wasn't any demand, then it wouldn't matter if the sale originally involved a dealer or not. (Unless said former-dealer was unclear on the concept of business.)
Exactly. The dealer model hasn't exactly helped Fisker any - while all the dealers remain, they all want exorbitant amounts of money to do any work on the vehicle. And an independent group has surfaced offering support for the vehicles regardless - but of course, you still have to pay.
Now you have the result of owners having paid thousands more because of the extra middle man - and certainly the extra middle man didn't help Fisker's profitability any, either.
Re:Texas, North Carolina Fighting Tesla's Dist Mod by Anonymous Coward · 2013-05-22 12:16 · Score: 2, Funny

That argument is equally flawed as Pontiac, Mercury, Oldsmobile and Saturn were nameplates of larger parent companies. For that matter, the first three had fleets of cars that were merely rebadges and varied trim levels of the parent companies vehicles. Tesla only has one badge, one brand. If they closed shop tomorrow, that would be that. Sort of like when American Motors closed shop. Or Daewoo. You don't see either of those dealers still open.
This is nothing more than State senates trying to give the wealthy citizens of their state an opportunity to muscle in and make a profit off Tesla selling cars. And Federal Interstate Trade laws should trump this. Otherwise, what is to stop a State from closing Disney Stores, or American Eagle, or Apple Stores... ... ohhhhhhhhhhhhhhh nevermind... these laws are AWESOME!!!
Re:Electric cars are just not going to take off... by PortHaven · 2013-05-22 12:41 · Score: 2

Less moving parts on a Tesla. Likely lower maintenance too.
Re:Electric cars are just not going to take off... by voidptr · 2013-05-22 12:51 · Score: 2

That's not exactly a scenario I or most other people do often enough to make it influence which car I buy. For the once a decade I need to get from NYC to LA in a day and a half, I can rent or take a plane.
Of course, the irony here is once the Supercharger network finishes building out along I-40, I may very well drive from coast to coast a few times, since the Superchargers are cheaper than airfare.

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Re:Maybe they missed the point of the loan... by adolf · 2013-05-22 12:55 · Score: 2

Just because Tesla is having production issues, does not mean that they're not having problems in terms of market penetration.
The two concepts are mutually exclusive.

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Re:Correction: Tesla Motors takes billion dollar f by tibman · 2013-05-22 12:56 · Score: 2

Tesla sold 5,000 Model S cars in just Q1 2013 alone.

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The car sales industry is notoriously broken by Phil+Urich · 2013-05-22 13:00 · Score: 2
NPR's Planet Money had a great story about it just a few months ago.

Dealers contribute a big share of state sales tax revenues — as much as 20 percent in some states — and they tend to be big local employers. That makes state and local legislators listen.
It's definitely worth listening to the story, as there's a rich and interesting history that leads to the rather broken present reality in the States.
- Short All Things Considered story | direct mp3 link
- Full Planet Money episode | direct mp3 link
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US corporations do not pay enough taxes? by manu0601 · 2013-05-22 13:31 · Score: 2

We see many situations where US companies spend their cash to reduce their capitalization instead of investing. I understand it means they have too much money in their hand. That is, they do not pay enough taxes.
Re:That's Slashdot... by xero314 · 2013-05-22 14:01 · Score: 4, Interesting

Musk has no employees on government assistance. Walmart explicitly pays employees just under the level to recieve government assistance so they don't have to provide health insurance. Tesla makes high quality products as they have shown they will reduce cost with out quality. Walmart sells disposable shit that ultimately cost more because they have no longevity. Teslas are manufactured in the usa. Walmart products are almost exclusively manufactured in china. Musk sells directly to his customers. Walmart is nothing but an unnecesary middle man getting wealthy off the ignorance of the people you think they are helping. Should I go on?