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Tesla Repays Department of Energy Loan Nine Years Early
91–100 of 192 posts
Re: Tesla Repays Department of Energy Loan Nine Years Early
#92Earlier quoted context omitted.
I'm sure there was some money wasted along the way, but this makes me think of the often-quoted (around here at least) anecdote that VCs succeed not by getting decent returns across the board but by having one or two "home runs". If Tesla is the home run that this ATVM program made possible, maybe it doesn't matter if all the rest end up defaulting on the loans (which this article doesn't even imply, Tesla seems to h…
As you noted, the problem is that the government bought debt, not equity, so they don't share in the upside that would make this a financial home run that makes up for other failures. That being said, the government isn't in this to make money, they're in it for the broader benefits that will spillover outside of the individual company receiving financing. In that sense the VC analogy could work, because a major succ…
What the fuck are you talking about? They are in it for the money, in the form of taxes. Taxes that are then used for public services.
Re: Tesla Repays Department of Energy Loan Nine Years Early
#93Earlier quoted context omitted.
they are not free, they are paid by any consumer who directly or indirectly has a relationship with someone who purchases a vehicle from one of the makers who is paying these credits. Voluntary my ass. If they don't pay what happens? Your fined. Its a tax. It is paid by consumers because they buy cars. If anything its California's way of having people in other states fund their initiatives. I guess kudos can go to Mu…
Ummm... no. The car companies have three choices: 1) buy credits, 2) pay fines, 3) make low emission cars that earn their own credits. These kind of policies that are designed to prevent the "tragedy of the commons" happen all the time in government. You still might not agree with this type of governing, but your basic facts are wrong.
Don't forget 4) they can leave the market. It's not something they are forced to do in anyway, it is a voluntary choice to continue serving that market.
Re: Tesla Repays Department of Energy Loan Nine Years Early
#94Earlier quoted context omitted.
fear that letting Detroit go bankrupt would have a domino effect that would leave a gaping crater in employment You mean like the +20% currently unemployed in Detroit? The best thing about Detroit is that one day it will be used as a case study of why entitlements don't work out the way people think they do.
I was using "Detroit" in this context as a metaphor for the car industry. GM going bankrupt would bankrupt a ton of suppliers spread throughout the midwest. As for Detroit, its problem has nothing to do with entitlements. Detroit was never New York or San Francisco, after all, in terms of entitlements. The midwestern industrial cities all have the same problem, and it's not entitlements, it's the automation of Americ…
Read up on the "Model Cities Program" and I think you'll see what I was talking about, even in regards to automation.
In terms of if GM had gone bankrupt, I think any supplier that was competitive at the time would still be here today. They may be supplying their goods to a different manufacture along with some other hardships, but companies that are competitive and in control of their workforce can make those changes when the time comes.
Re: Tesla Repays Department of Energy Loan Nine Years Early
#95Earlier quoted context omitted.
Well yeah. The bailout terms were heavily slanted towards the unions. Of course Ford preferred the bailout to competing against some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms.
>some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms. You do realise that care companies are one of the most asset-heavy companies in the world right? Nobody would have been able to pick up the pieces in a credit-crunch recession. Independently of that, there would still have been a long period between the shutdown of the company and it being picked up,…
>Nobody would have been able to pick up the pieces in a credit-crunch recession.
All the pieces? No. But some. With a chance at picking up an additional 10+% of the US market, you don't think Toyota or similar could get enough credit to buy a couple factories and hire the better half of the laid-off workers?
Re: Tesla Repays Department of Energy Loan Nine Years Early
#96The reason why Tesla is able to pay the Dept of Energy loan early is because of a secondary stock and bonds offering worth about >850+ million. In another words, Tesla is raising funds by generating more debt (from bondholders) and diluting share value (from shareholders), roughly about 3.5 mil out of 40 mil float, and using that money to pay the US govt. TSLA rose on the news despite diluting shareholders is because…
"TSLA rose on the news despite diluting shareholders is because coupled with the announcement, Elon Musk mentions that he will personally put an additional 100mil into the secondary offer"
Dilution doesn't care who does the diluting - a share issued to Elon Musk dilutes as much as a share issued to TIAA-CREF. Regarding the double down, I do not believe Elon Musk's commitment to Tesla was in doubt previously. Its effects were probably limited to the marketing of the issue.
More critical is: (a) TSLA maturing to where it can issue debt (albeit, of the convertible type), (b) its extrication from a volatile political situation, and, (c) its new liquidity buffer. I do not think it is appropriate to characterise it as a "PR ploy". As you mentioned, they are still unit loss-making - that those losses need to be financed is more than superficial.
Re: Tesla Repays Department of Energy Loan Nine Years Early
#97Earlier quoted context omitted.
Yet GM still went bankrupt...just a few months later. People forget that. So what was really gained?
There's bankruptcy as in a controlled restructuring, and then there is bankruptcy as in a failure of the business with ripple effects throughout the economy. What GM went through was the former, and it was foreseen at the time of the government's investment.
There was nothing to keep them from going through a controlled bankruptcy at the start of it.
Re: Tesla Repays Department of Energy Loan Nine Years Early
#98The reason why Tesla is able to pay the Dept of Energy loan early is because of a secondary stock and bonds offering worth about >850+ million. In another words, Tesla is raising funds by generating more debt (from bondholders) and diluting share value (from shareholders), roughly about 3.5 mil out of 40 mil float, and using that money to pay the US govt. TSLA rose on the news despite diluting shareholders is because…
Considering the terms of the government loan were very favorable (rates equal to the interest rates on Treasury notes in 2010) it doesn't make sense to me that they would want to pay it off early and get rid of all that liquidity. As a quickly growing company didn't they have something better to spend that $450 million on?
Yeah, that puzzled me too. The PR couldn't be worth that much, could it? How could the interest possibly be more expensive than the stock dilution?
Unless they just don't like having debt outstanding which seems understandable... though with debt that cheap...
Re: Tesla Repays Department of Energy Loan Nine Years Early
#99Earlier quoted context omitted.
Gross margin, and it's tiny without the credits. Tesla's most recent quarter resulted in an operating loss and a net loss. Edit: my bad. Seems the net income was slightly positive last quarter (with regulatory credits included, without them it's a big old negative).
But the Model S itself is gross margin positive? That's all I was wondering.
The gross margin is 17%, but I was surprised to learn that includes ZEV credits.
From 10Q: >During the first quarter of 2013, we recognized $67.9 million in ZEV sales, which contributed to our gross margin.
http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-13-...
Re: Tesla Repays Department of Energy Loan Nine Years Early
#100Tesla's early repayment of their DOE loan has prevented the U.S. government from exercising three million warrants, which would have netted America around $250 million at the current stock price. Smart move for Tesla, almost a huge boon for U.S. taxpayers.
Oh, they had stock warrants? That explains it. Trading the low-interest debt for stock wouldn't make any sense otherwise.