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US Gov't changes terms on Tesla Loan

There may be a better article about it, but I saw the news here

They have waived the requirement to for the October $14m repayment, and moved from fixed repayments to "metrics based". Haven't found any details about the latter yet. Sounds like the government is throwing Tesla a big bone. The Solyndra-ites will be going crazy.

This is good news for Tesla in terms of keeping the company solvent, but I'm sure there's going to be huge negative press fallout.

The big difference being that Tesla is making a viable product that can reasonably be expected to turn a profit in the near future, whereas Solyndra was not.

Not that any such thing will prevent the criticism you are predicting. Most people don't know what Tesla is up to these days and don't recognize that the Model S is not another glorified golf-cart.

As some would label a right wing hardcore Republican, I as a Signature owner to be, don't have a problem with government backed loans to companies producing a viable product ....I invested my $5,000.00 years ago (now $40,000) because I saw this as a worthy gamble.

That being said, I do have a problem with government loans to companies that start out with a product that cannot compete on a mass produced level. And, I do have a problem with loans handed out to "friends" of an Administration. And, I have a major issue when the terms of the loan do not allow for the taxpayers to be first in line at bankruptcy court for a check.

More details from Bloomberg: http://www.bloomberg.com/news/2012-09-25/tesla-told-to-speed-repayment-o...

"The Palo Alto, California-based company, led by billionaire Elon Musk, said yesterday in a U.S. regulatory filing that it has until Oct. 31 to submit a proposal for “early repayment” of loan principal to the Energy Department."

Is the government throwing Tesla a bone or a lifeline?

Is there any company that did not receive preferential treatment in some form or the other? As much as I can think, there isn't any.

There always are industry lobbyists, tax breaks, incentives, loopholes, etc. that will take advantage of what is available. Friends or not, loans or not.

I think, on the contrary, it is a good idea for government, to quote Steven - 'throw a bone', to nascent industries. This will encourage more industries, more competition, and more choices. What is important is to do this in an open way, with the terms and conditions available for everyone to view, along with benchmarks and evaluation metrics to measure progress. I'd prefer it this way rather than the GE way or paying no taxes for $14B profit.

The negative press may be temporary. But, once Tesla starts rolling out and makes news with its products and jobs, it will be good press. Of course, as long as politicians and pundits are honest about what they say and people view them with an open mind.

~ Prash.

It's more of a lifeline really, they are pretty close to being out of cash, hence the second offering (dilutes the value) and more favorable loan repayment plan.
They've missed an estimate by a lot (half), that's the worst case of over-promise and under-deliver even if they didn't commit to 5,000 by EOY on paper.
Everybody (read analysts) was expecting it since they did set this expectation publicly.
It's still better than delivering an unfinished product with quality issues (Fisker, anyone?), but they for sure are on the spot right now, especially before the elections.
Let's hope they catch up and get out of this mode in no time.

I also think the US government is looking at it like this is a pretty sure thing on the repayment if Tesla is given a little more time. This is NOT like a solar panel company that is creating a product that cost more to build than it is being sold for.

As far as missing the mark by a lot... the usual. Tesla makes every promise and more then one misstep and throw Tesla to the wolves.
"Everybody (read analysts) was expecting it since they did set this expectation publicly."
Yes and almost every analyst has also said Tesla would never get this far or they'd never make this, or get to that. It is easy for an analyst to get it right since they don't get any flack when they are wrong 90% of the time.

Tesla..... do 99 thing right, get 1 wrong
Analyst.... say 100 thing about Tesla, get one guess right.
"Oh see the analysts were right all along!"

Not that sergiyz is saying that but I can see the headlines coming.

The "dilution" is trivial -- about 5%.

If the supplier bottleneck unblocks somewhat in the near future, things could change in a hurry. TM is not counting on that, making conservative revisions and arrangements.

Remember that Elon has said he will make good on any potential default from personal funds, which he is now in a position to do. Any move in that direction prematurely would be a mistake, of course.

The reservation/sales impact of the SC network has yet to be seen, and will have much to say about the outlook. IMO, it is really the first high-impact marketing gesture/action by TM. It could be huge.

I am very concerned that despite Tesla' achievements in design, electric powertrains and quality they may go under. As I'm sure many will agree the car industry is on par with their peers in the semiconductor world in being cut-throat.

Sometimes I also get a bit of an inkling of conspiracy when I consider the other car manufacturers' influence over suppliers. Although it is difficult to prove some companies have indeed been caught coercing suppliers not to do business with competitors or risk losing contracts/co-branding money.

(See: http://www.maximumpc.com/article/news/eu_posts_sordid_details_intel_anti...)

Hopefully Tesla is not subjected to unfair business practices and continues to really ramp up production. I want my S!


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