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In the biggest win for the Obama administration’s plan to fund alternative fuel technologies, Tesla Motors today paid off the final $451.8 million in their government loan – nine years ahead of schedule. What does this mean for the future of government funding and the EV industry in the future?
“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,” said Tesla CEO Elon Musk. “I hope we did you proud.”
Tesla also made smaller payments in 2012 and earlier this year, fulfilling the entire $465 million loan entirely with today’s payment. The electric automaker is riding a wave of momentum, as its stock price rocketed after posting their first quarterly profit and receiving a 99/100 score from Consumer Report on their new Model S sedan.
The success of Tesla is due to many factors, especially when compared to recent failures like that of Fisker and Coda. For one, Tesla has the private backing of Musk, who pumped hundreds of millions of his own money into the company during rough times. For another, the Model S has been a massive hit since its release last summer. But vehicle sales alone have not been enough to offset the massive costs of auto production.
Several shrewd business moves proved to take Tesla to the top, from outfitting an old Toyota plant to produce cars rather than buying and building a brand new facility, to a partnership with companies like Mercedes-Benz to develop and sell battery component for use in their future cars.
Tesla seems to be on solid ground for the first time in its ten-year history, thanks to sounds business decisions and, yes, a quality product. Past disasters may have cooled government loans for the time being, but Telsa proves that investing in the right company can go a long way. Their place in the industry now solidified, we have a bright future ahead that includes not only Tesla vehicles, but other brands making better cars thanks to their work.
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