Tesla Pays Off Federal Loan

[mkjeeves]

Electric car maker Tesla Motors, in a move that is sure to buoy both the company and the Obama administration, announced Wednesday that it has paid off its entire federal loan.

It is paying off $451.8 million of the remaining loan approved by the Energy Department in 2009 -- with interest.

The loan program has been a major controversy, with Republicans pointing to the failure of solar panel maker Solyndra and likely bankruptcy filing by plug-in hybrid car maker Fisker to make the case that the government embarked on risky "green energy" loans. Former Massachusetts Gov. Mitt Romney cited Tesla, along with Fisker, in bashing President Obama over the loans during the presidential campaign last year.

On his second day as the new Energy Department secretary, Earnest Moniz hailed Tesla's repayment as proof that the loan program is delivering results for taxpayers. So far, losses amount to about 2% of the $34 billion portfolio.

"Today, Tesla employs more than 3,000 American workers and is living proof of the power of American innovation," he says in a statement. "This is another important contribution to what the Obama Administration has done to preserve and promote America's auto industry."

Tesla's move had been anticipated since last week when it took advantage of a soaring stock price to issue more stock shares and make a bond offering. The stock price rose after the company reported that it had earned a profit in the first quarter, the first since its founding.

Tesla makes the all-electric Model S sedan, which has received critical acclaim -- including a 99 out of 100 score from Consumer Reports in its testing and Motor Trend Car of the Year -- but with a starting price of nearly $70,000, remains out of the price reach of most car buyers. Tesla is due to start production of an equally expensive gull-winged SUV, the Model X, later this year.

Tesla, in announcing the payback, said it is the first automaker to fully repay its loan.

Tesla pays off its $451 milllion federal loan

[Midtowner]

This isn't going to fit the Republican narrative...

[hoya]

Tesla seems to be a well-run company from everything I've seen.

[CuatrodeMayo]

Model X

[Pete]

I'm starting to see a bunch of Tesla's on the road out here in California -- super sharp looking car and very well-reviewed.

Looking forward to seeing their future products.

[LakeEffect]

This isn't going to fit the Republican narrative...

Repubs in North Carolina are trying to pass a bill to make Tesla illegal in NC. I heard Texas too.

They say it's because they sell directly to consumers, not through dealerships, and that selling that way may hurt consumers...

[jedicurt]

haha... easiest job in America, Fact Checker for Fox News... because they just don't care

[Dubya61]

Repubs in North Carolina are trying to pass a bill to make Tesla illegal in NC. I heard Texas too.

They say it's because they sell directly to consumers, not through dealerships, and that selling that way may hurt consumers...

Please say you're kidding. Does that mean you can't sell stuff on Craigslist, too? or online? Is it because they will miss out on some state tax on the purchase if not conducted through a dealer? Any idea?

[LakeEffect]

Please say you're kidding. Does that mean you can't sell stuff on Craigslist, too? or online? Is it because they will miss out on some state tax on the purchase if not conducted through a dealer? Any idea?

North Carolina Tesla ban? Bill would prevent "unfair competition" with car dealerships.

I wish I were kidding.

[hoya]

North Carolina Tesla ban? Bill would prevent "unfair competition" with car dealerships.

I wish I were kidding.

I'm pretty sure this violates the Commerce Clause and is 100% unconstitutional.

[jedicurt]

kind of funny , cause it seems as though it is a bill against capitalism, which most republicans (*note i'm registered republican) claim to be one of their core platforms to protect

[BoulderSooner]

here is what this is all about

A new paradigm for auto sales

According to the National Automobile Dealers Association, 48 states have franchise laws that forbid or restrict the ability of automakers to sell vehicles directly to the public. That's why dealerships tend to be independently owned and operated. Tesla showrooms, on the other hand, are owned by Tesla itself.

However, Tesla says that the majority of its showrooms -- designed by George Blankenship, the man behind Apple's outrageously successful chain of retail shops -- don't actually conduct sales; they simply share information about Tesla vehicles. When it's time to seal the deal, Tesla staff point prospective shoppers to the automaker's website, where they can customize and reserve their vehicle

Other dealers aren't buying it. They insist that even though Tesla's showroom staff don't technically sell vehicles on site, they do everything else that a traditional dealership would do. In short, they argue that by facilitating the sales process, Tesla showrooms are essentially conducting sales.

To date, questions about the legality of Tesla showrooms have arisen in four states: Illinois, Massachusetts, New York, and Oregon

and the list is growing

[mkjeeves]

here is what this is all about

A new paradigm for auto sales

According to the National Automobile Dealers Association, 48 states have franchise laws that forbid or restrict the ability of automakers to sell vehicles directly to the public. That's why dealerships tend to be independently owned and operated. Tesla showrooms, on the other hand, are owned by Tesla itself.

However, Tesla says that the majority of its showrooms -- designed by George Blankenship, the man behind Apple's outrageously successful chain of retail shops -- don't actually conduct sales; they simply share information about Tesla vehicles. When it's time to seal the deal, Tesla staff point prospective shoppers to the automaker's website, where they can customize and reserve their vehicle

Other dealers aren't buying it. They insist that even though Tesla's showroom staff don't technically sell vehicles on site, they do everything else that a traditional dealership would do. In short, they argue that by facilitating the sales process, Tesla showrooms are essentially conducting sales.

To date, questions about the legality of Tesla showrooms have arisen in four states: Illinois, Massachusetts, New York, and Oregon

and the list is growing

I heard the story originally from a Tesla employee several years ago WRT Texas and my understanding is as follows... Even if Tesla sold directly from their company showroom in Texas, it would be illegal in Texas. Texas prohibits an automaker from selling directly to the public without an intermediate, independently owned car dealership. Tesla's plans do not include having independent dealers. All stores and showrooms will be owned and operated by Tesla and all sales and service will be directly with Tesla. That's their planned business model worldwide. I don't think a couple of states will make them give that up without a big fight, if at all.

Great company. I expect this will work in their favor in the end. I wish them the best of success.

[BoulderSooner]

I heard the story originally from a Tesla employee several years ago WRT Texas and my understanding is as follows... Even if Tesla sold directly from their company showroom in Texas, it would be illegal in Texas. Texas prohibits an automaker from selling directly to the public without an intermediate, independently owned car dealership. Tesla's plans do not include having independent dealers. All stores and showrooms will be owned and operated by Tesla and all sales and service will be directly with Tesla. That's their planned business model worldwide. I don't think a couple of states will make them give that up without a big fight, if at all.

Great company. I expect this will work in their favor in the end. I wish them the best of success.

48 states have versions of that law .. not "a couple"

[mkjeeves]

48 states have versions of that law .. not "a couple"

48 states aren't fighting sales. I can assure you Tesla has sold cars in all markets and most sales haven't been challenged, much less been illegal. Every Tesla gets registered at the state level so it's not like they don't know about it. Only some have been challenged where they have showrooms. When the company is hugely successful but you can't buy their product in some states without jumping though a bunch of hoops of paying some vig to the local powers, I have faith public pressure will override special interest money of the local car dealerships. (Perhaps I should be more cynical about it and about whatever levels of fear and involvement the big automakers have with the issue.)

[Plutonic Panda]

Teslas are great cars. I've been seeing a few around Edmond and OKC as well. Our neighbor has a roadster and is thinking about getting a model s. Very neat! I'm pretty sure you would have to baby the throttle to get 400 miles though.

[CaptDave]

This isn't going to fit the Republican narrative...

Very true - I wonder if Palin knows how to hunt crow? She certainly needs to enjoy a crow feast along with Mitt and most other people with (R) after their name.

Read what the large automakers did to Tucker. This is not unexpected. Tesla has Elon Musk though and I think he has the spine and bank account to take them on.

[Larry OKC]

Tesla, in announcing the payback, said it is the first automaker to fully repay its loan.

DOn't know anything about them, and not trying to make this political, but didn't GM take out full page ads declaring they had paid their loan back? Then it cam out that they paid the loan with other loans (IRC, it was with other government loans). Did this company do the same?

with a starting price of nearly $70,000, remains out of the price reach of most car buyers

how does that factor into the long term success and survival of the company?

[mkjeeves]

They also have deals to sell drive trains.

Forget what you've heard about delays with the Model X. Tesla Motors (NASDAQ: TSLA ) shareholders can expect their company to introduce at least one game-changing vehicle in 2014. Only it'll be Mercedes-Benz that builds the car.

And that's good news, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova. A small, but growing, portion of Tesla's revenue is derived from creating fully electric drivetrain systems for other car manufacturers, including Mercedes and Toyota Motor (NYSE: TM ) . The Electric Drive looks to be Mercedes' first attempt to make good on its relationship with, and 4.3% equity stake in, Tesla.

Mercedes Introduces Tesla-Powered Car

[Just the facts]

This thread is an example of how screwed up this country is. Republicans inserting an un-needed middleman in a private transaction, and the OKCTalk left wanting government out of the transaction.

[jedicurt]

This thread is an example of how screwed up this country is. Republicans inserting an un-needed middleman in a private transaction, and the OKCTalk left wanting government out of the transaction.

haha. yep. my thoughts exactly

[Snowman]

Repubs in North Carolina are trying to pass a bill to make Tesla illegal in NC. I heard Texas too.

They say it's because they sell directly to consumers, not through dealerships, and that selling that way may hurt consumers...

The cars would not be illegal though, it is basically trying to force them into doing some sort of dealership arrangement. Seems stupid, and like someone bought a friend in congress.

[RadicalModerate]

The cars would not be illegal though, it is basically trying to force them into doing some sort of dealership arrangement. Seems stupid, and like someone bought a friend in congress.

[Just the facts]

Remember in 2010 when the Treasury Department closed the GM and Chrysler dealerships as part of the auto bailout program and it turned out 96% of the closed dealerships were owned by people who donated to Republicans. It was dismissed as conspiracy talk and 'bad math' back then - but now we know about the IRS.

Even Snopes said it was false.

snopes.com: Steve Rattner - Car Czar

Maybe the need to re-open their analysis in light of new information regarding the activities in other parts of the federal government.

[Just the facts]

Remember in 2010 when the Treasury Department closed the GM and Chrysler dealerships as part of the auto bailout program and it turned out 96% of the closed dealerships were owned by people who donated to Republicans. It was dismissed as conspiracy talk and 'bad math' back then - but now we know about the IRS.

Even Snopes said it was false.

snopes.com: Steve Rattner - Car Czar

Maybe they need to re-open their analysis in light of new information regarding the activities in other parts of the federal government.

Also, didn't Tesla recently hire all those UAW employees?

I am starting to see how the battle lines got drawn.

1) Team Obama closes Republican car dealers
2) Tesla hire UAM employees
3) Tesla by-passes existing republican dealerships
4) Mystery solved.