In a rather surprising announcement from the all-electric car company, Tesla said they are making plans to repay their government loans 5 years ahead of schedule. Tesla received approximately 465 million U.S. dollars from the U.S. Department of Energy to help finance the company.
Tesla Motors received approximately 465 million dollars from the U.S. Department of Energy in 2011 to help finance with the growth of the company. Now the company says they are doing well enough that they will be able to repay that loan five years ahead of their previous schedule.
During Tesla’s annual report on March 7, 2013, they have amended their previous agreement and approved to repay their loans earlier than expected. According to Tesla’s Chief Financial Officer Deepak Ahuja, he said they’ll begin repayment in 2015 and then make a lump sum payment for the remaining balance sometime in 2017.
The original loan agreement had Tesla repaying by 2022. Back in September of 2012, Tesla hinted that they were working out a way to make the repayment back to the DOE. This latest announcement came as a bit of a surprise to many and speaks clearly how well the company is operating.
One big reason for the early pay off was the 3 million shares Tesla would have to give the U.S. government if the loan was not paid in full by the allotted time schedule. While the company is doing rather well, paying off the loan early was also a big incentive for the company since the value of those 3 million shares could be worth quite a sum of money in 8-9 years.
Tesla’s latest production model is the 4-door Sedan Model S, which was awarded the 2013 Car of the Year by Motor Trend magazine. The Model S was also Tesla’s first all-electric sedan model built and marketed from the ground up that is available to a mass market.
Motor Trend said (in reference to choosing the Tesla Model S) that it was the first time that a unanimous panel of judges chose a car to be car of the year.
Tesla says they will be producing their first SUV beginning in the fall of 2014 at their Fremont, California plant. There will be about 15 thousand Model X SUV crossovers built in 2015, and if sales do well Tesla plans to bring that number up.