California Green Car Company Tesla Repays Government Loan Early, Silencing GOP Critics (VIDEO)
by Nathaniel Downes • May 22, 2013
During the presidential debates last year, Mitt Romney pandered to his base through his painting of green energy companies, including Tesla Motors, as “losers.”
This of course did not go over well at Tesla, where founder and CEO Elon Musk defended his company against Mitt’s lumping of his firm alongside Fisker, a company sued by Tesla in 2008 for stolen designs. The following week, Bloomberg reported that Elon Musk was ‘not happy’ with the label by the one-time GOP nominee:
Now that the election is over, Romney’s words are still haunting the Republican Party. Many pundits for the GOP latched onto those words, claiming that the green energy automotive loans were a failed investment. Today is a sad day for them, as their entire mantra comes crumbling down. You see, Tesla Motors is repaying their government loan early, with Elon Musk, Tesla’s chief executive officer, posting on his twitter feed:
"Given govt loan repayment this week (prob Wed), Supercharger update will be next week. Work continuing independent of announcement."
And down goes Romney, beaten with his own words, once again. And with him, the entire Republican Party. Not only is Tesla not a “loser,” it is repaying its auto loan 9 years early. This even caught Bloomberg by surprise, as their talking heads had to try and catch up as the news passed them by:
Bloomberg correctly points out that what Tesla did with the loan was to invest in support for its vehicles, unveiling a network of charging stations for Tesla vehicles which directly addresses the main concern over Tesla vehicles, the disparity between refueling points between electric vehicles and gasoline based vehicles. By setting up a network from which Tesla owners can charge their vehicles, Tesla has put themselves, while not on-parity with the 100 years of subsidized petroleum based vehicle refueling stations, at least in the game. With the repayment of the loan, Tesla Motors is in a very good position moving forward.
But what of the other companies funded under this program?
The Republicans are quick to jump on A123 and Fisker, and claim that one success does not make a successful program. However, these two companies failure is inter-related, so need to be considered as one. A123 was the battery supplier for Fisker Automotive, which had a major problem with battery failures resulting in recalls which cooled reception for the highly anticipated $100,000 luxury sports car. This in turn hurt A123′s revenue curve, forcing it into bankruptcy last year. And with A123 going into bankruptcy, and the disruption of the key technology for Fisker’s sole product forced Fisker into bankruptcy, where it is now potentially to be purchased by auto legend Bob Lutz. It did not help that, in order to avoid bankruptcy, Fisker turned to Huron Consulting Group, which was found to have engaged in accounting violations.
None of these firms, however, are the largest of the green vehicle government loans. That honor goes to Ford Motor Company, and Nissan Motor Co. Both firms have used these loans to produce new, innovative and popular vehicles. Ford now has five different models of electric and hybrid vehicles, and Nissan introduced the Leaf. Both firms are on track to repay their loans on schedule.
This is the reality, that the loan program, created by President Bush, has been an overall success. While some firms have gone under, the majority of the loans are producing dividends, and will result in a direct net profit for the government. But, more importantly, by the time they are repaid, our roads will not be the same, and a new, rapid growth industry will have taken root. Already electric and hybrid vehicles account for 1% of all vehicles on the road within the US, remarkable considering the first modern mass market electric hybrid in the United States was introduced in 1997 and the first modern mass market electric in 1998. Imagine what another 10 years, combined with the rapid growth of charging stations across the nation, will bring.
As for his original comments, Mitt Romney has remained silent on this topic since announced.