Tesla CEO Blasts Critic, Says Gov't Loan Is 99 Percent Sure and Deserved

Two major themes of our time – the desire to achieve energy independence and the furor over public bailouts – have collided in the drama surrounding swanky electric carmaker Tesla.

Late last year, a New York Times column whipped Silicon Valley innovators and bailout-weary taxpayers into a frenzy. Valley professor and writer Randall Stross wrote that Tesla was hoping for government money to produce its cars, which only the very wealthy could afford.

It wasn't exactly true, since the loan was intended to produce the $50,000 Model S sedan, not the $109,000 Roadster. Still, Stross called it a risky, waste of taxpayer money that would only benefit the wealthy and bailout VCs who'd sunk money into the money-losing company. Never mind, Tesla has developed two cars on less than $200 million—compared to the $1 billion General Motors spent developing the now-deceased EV1.

Back in November, we weighed in on the side of Tesla here at TechTicker, and other figures around the Valley did, too. Still, our comments raged with people who didn’t want the company to get a government cent — even in the form of a loan. 

We sat down with Tesla’s well-known founder, investor and CEO Elon Musk at the unveiling of the Model S in Silicon Valley this week. He gave us the latest on the loan and had harshe words for critic Stross:

• “What is he doing picking on an electric car company? Why would he pick on the little guy who is trying to do good when you’ve got egregious waste of money in the tens of billions occurring in Detroit?”
• He points out this isn’t part of the TARP bailout fund; it’s a low-interest loan to spur clean-tech development and wean the U.S. off foreign oil.
• Musk: “All existing investors in Tesla – me or common stock holders, the employees – will only get paid back if we repay that entire loan to the government.”
• Tesla is applying for just 1.5% of the $25 billion appropriation. 
• Musk says he’s almost 100% sure the company will get it, and get it soon. 

See also:

Behind the Design of Tesla’s Sexy New Sedan