Published on August 1st, 2012 | by Christopher DeMorro
Tesla Could Start Repaying Federal Loans Early
The government’s role in developing new technologies has come under fire from the Republican Party in recent months, in particular low-interest Federal loans given to electric car companies like
Think Global Fisker and Tesla. And while Think is facing bankruptcy for the umptenth time, Tesla Motors may start paying back its Federal loans early…despite another quarter of multi-million dollar losses.
Mounting Losses No Problem
Tesla reported a 2nd-quarter loss of more than $105 million, worse than analysts expectations. Revenue was also down 54% from the same time last year, which would seem to indicate trouble at the electric car maker. But head-honcho Elon Musk doesn’t seem too concerned. In fact, Musk seems to think that Tesla can start paying back its $465 million Federal loan as soon as December.
That is ahead of schedule, and is perhaps a good-faith attempt by Musk to defuse questions of Tesla’s long-term viability. Right now Tesla is in a bit of an odd spot; their first popular model, the Roadster, is no longer being built as Tesla ramps up production of the Model S Sedan, which started rolling off of assembly lines last month.
Optimistic Outlook, But Wheres The Profit?
According to Musk, there is a 10-11 month waiting period for the Model S sedan, and it would require very little capital for Tesla to amp up production. You’d think they’d do that already, what with its current and future models apparently in such high demand. But what do I know?
In my opinion, Tesla Motors can still go either way. It’s biggest advantage is Musk himself, who seems dedicated to making his electric car company work. But is sheer will alone enough to wipe out a decade of losses? Is Tesla a long-term company, or a flash in the pan?