Tesla Repays $451 million Government loan ten years early and will get about $188 million this year selling Zero Emission credits

Tesla Motors announced that it has paid off the entire loan awarded to the company by the Department of Energy in 2010. In addition to payments made in 2012 and Q1 2013, today’s wire of almost half a billion dollars ($451.8M) repays the full loan facility with interest. Following this payment, Tesla will be the only American car company to have fully repaid the government for a Dept of Energy loan.

The loan payment was made today using a portion of the approximately $1 billion in funds raised in last week’s concurrent offerings of common stock and convertible senior notes. Elon Musk, Tesla’s Chief Executive Officer and cofounder, purchased $100 million of common equity, the least secure portion of the offering.

In the first quarter of 2013, Tesla sold nearly $68 million of the zero-emission credits to other automakers. That represented 12% of its overall revenue. Other automakers are buying the zero emissions credits are concerned they won’t able to meet tough new environmental regulations requiring that more than 15% of sales in 11 states be zero-emissions vehicles by 2025. Adam Jonas, auto analyst with Morgan Stanley, who estimates that the credits will come to $188 million this year.

In 2010, Tesla was awarded a milestone-based loan, requiring matching private capital obtained via public offering, by the DOE as part of the Advanced Technology Vehicle Manufacturing program. This program was signed into law by President Bush in 2008 and then awarded under the Obama administration in the years that followed. This program is often confused with the financial bailouts provided to the then bankrupt GM and Chrysler, who were ineligible for the ATVM program, because a requirement of that program was good financial health.

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