The U.S. Energy Department announced that Tesla Motors (TSLA), the electric car company founded in 2003 by PayPal creator Elon Musk, had repaid its $465 million loan nine years ahead of schedule. The Energy Department provided the financial resources to Tesla in 2010 as part of the Obama Administration’s Advanced Technology Vehicle Manufacturing program. Tesla said it was able to repay its loans by using a portion of the approximately $1 billion in funds the company raised in last week’s offering of stock and debt.
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“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,” Musk said in a statement. “I hope we did you proud.”
The Palo Alto-based company employs 4,500 workers in the U.S. and has about $679 million in available cash. Taxpayer money helped Tesla finance its Model S battery powered sedan, which retails for about $70,000 (the price varies depending on added features and options). Consumer Reports recently named the Model S as the best car it’s ever tested, giving it a score of 99 out of 100.
Investors have been one of Tesla’s biggest fans, driving the car company’s shares up 143% since January. Yet many of Tesla’s customers are wealthy West and East Coast professionals who can afford “another toy, a 4th car in the driveway,” says The Daily Ticker’s Henry Blodget. Whether Tesla can expand its user base and appeal to middle America depends on many factors, adds Yahoo! Finance Senior Columnist Michael Santoli.
“Does Tesla need oil to stay up around $100 for the very long term?” he asks. “There are hurdles to owning an electric vehicle. I don’t know anyone that owns it. I’m still skeptical.”
Tesla said it expects to sell 21,000 cars this year, an ambitious target. Its former competitor Fisker Automotive once thought it could forever change Americans’ driving habits too. Fisker’s sexy Karma hybrid plug-in made waves when it debuted in July 2011. The company, which was given a $529 million federal loan in 2009, is “now teetering on the verge of bankruptcy, has repeatedly missed production targets and other deadlines and the Energy Department has suspended loans” to the company, according to The New York Times.
The risks facing Tesla are tremendous but “the level of excitement for this car in this niche market is actually impressive,” says Santoli.
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