Tesla Repays Department of Energy Loan Nine Years Early • Hacker News Board

Re: Tesla Repays Department of Energy Loan Nine Years Early

#101

Post by ghshephard » Thu, May 23, 2013, 1:28 AM UTC

noname123 wrote: post #23

The 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…

It's these type of posts that make it to the top of a thread that make me not want to check into HN.

Can't we celebrate a company, that was called out as a bad stimulus target during the presidential debates actually paying back all their loans ahead of time? If there was one place I hoped I could go to celebrate an innovative company's success, it would be HN.

I take particular issue with, "Make no mistake, this is as much a PR ploy by Tesla to pump up their offering."

Paying back $450mm in loans isn't just a "ploy" - it's actually raising the money and sending it back to the taxpayers. And, at the same time, doing something innovative and forward looking - building electric cars - which, (look at Fisker) - is NOT a slam dunk, even with green credits.

I, for one, am applauding Tesla today. We can do that without saying that they will be successful in everything, and in the future. But today they are.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#102

Post by twoodfin » Thu, May 23, 2013, 1:40 AM UTC

nathan_long wrote: post #78

cdugg wrote: post #74

I don't remember getting a check from tesla nor was I asked permission to loan them money . The whole absurdity of "greater common good"

What's absurd about it? If pollution has bad and expensive effects (asthma, flooding, crop loss), those creating it should pay to help deal with it. It's like paying to have your own trash picked up instead of dumping it in your neighbor's yard. If you doubt that pollution is bad, that's another story, but you're in the minority and outvoted.

And you really think the best way to do that is to subsidize toys for rich folks?

Re: Tesla Repays Department of Energy Loan Nine Years Early

#103

Post by hobs » Thu, May 23, 2013, 2:00 AM UTC

SolarNet wrote: post #93

Lightbody wrote: post #64

Earlier quoted context omitted.

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.

This is the most important point. The government of California is not god, and generally cannot force a business to do anything if you don't do business there.

All of the companies paying these credits are paying them because they choose to do business in that market.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#104

Post by mathattack » Thu, May 23, 2013, 2:11 AM UTC

guelo wrote: post #63

noname123 wrote: post #23

The 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?

I interpret it as a way to keep competitors at bay. "The public markets can fund electric cars. No more government loans are needed for us, or anyone else for that matter."

Re: Tesla Repays Department of Energy Loan Nine Years Early

#105

Post by PakG1 » Thu, May 23, 2013, 2:14 AM UTC

enraged_camel wrote: post #81

sillysaurus wrote: post #76

Earlier quoted context omitted.

I don't get your negativity here. It didn't read as negative.

Ploy, Noun: A cunning plan or action designed to turn a situation to one's own advantage. Synonyms: trick It definitely has a negative connotation.

Can we get away from splitting hairs here? Would we rather he have said:

"Make no mistake, this is as much a PR cunning plan or action designed to turn a situation to one's advantage by Tesla to pump up their offering."

? A synonym may be trick. But the definition you cited fits what was happening perfectly without intending the synonym. Synonyms aren't always interchangeable due to nuances in meaning differences.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#106

Post by NickM » Thu, May 23, 2013, 2:20 AM UTC

noname123 wrote: post #23

The 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…

Note that they are still selling each car at a material loss; and only managed to show a profitable quarter by trading green credits they gained from their manufacturing.

I'm not sure that's entirely accurate. I'm looking at their quarterly results for Q1 2013: gross profit was $96.3 million, but the ZEV credit sales were only $67.9 million for the quarter. Unless I'm missing something, it would appear that they are profitable even without taking the ZEV credit sales into account.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#107

Post by sjwright » Thu, May 23, 2013, 2:22 AM UTC

benaiah wrote: post #82

EGreg wrote: post #73

Earlier quoted context omitted.

Voluntarily it would take a lot to resist making maximal short-term profits from gas guzzlers for long term unproven gains such as the ones Musk's company has been doing. Are you saying governments shouldn't institute any regulations, including carbon credit systems, and everything should be decided by the free market? Sure, it's not voluntary, but then again neither is most of the stuff that producers of things do.…

Don't confuse free market advocacy with anarchy. Buying up judges, bribing other officials, and other fraudulent transactions, including stuff like misrepresentation of goods and other deceptive business practices, are not necessarily okay in a free market. However, direct government interference is. I don't advocate for a completely dog-eat-dog, caveat emptor society, but I do advocate for one in which those in powe…

So then who is going to "interfere" on behalf of the society at large? On behalf of the environment? Will individual consumers do what's right for the common good, for the first time in ever?

Look, everyone is part socialist, part capitalist, part communist, part fascist, part anarchist. Just don't fall into the trap of thinking your current favourite blend of these colours is the one true path. If there's one thing you learn looking around the world, there are many blends that have proven to work comparatively well. (And others that clearly don't.)

Re: Tesla Repays Department of Energy Loan Nine Years Early

#108

Post by hncommenter13 » Thu, May 23, 2013, 2:24 AM UTC

NickM wrote: post #106

noname123 wrote: post #23

The 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…

Note that they are still selling each car at a material loss; and only managed to show a profitable quarter by trading green credits they gained from their manufacturing. I'm not sure that's entirely accurate. I'm looking at their quarterly results for Q1 2013: gross profit was $96.3 million, but the ZEV credit sales were only $67.9 million for the quarter. Unless I'm missing something, it would appear that they are…

I believe you are missing something.

"During the first quarter of 2013, we recognized $67.9 million in ZEV sales, which contributed to our gross margin. ZEV credit revenue should decline in future quarters relative to our automotive sales as we grow our sales outside the United States and earn fewer credits on the 60 kWh Model S battery variant for those sales that occur in the United States. Other regulatory credit sales recognized during the first quarter of 2013 were $17.1 million." (1Q2013 10Q, p. 22).

$67.9 + 17.1 = $85M in revenue from ZEV + other regulatory credits. Presuming these credits have a nominal cost-I would imagine they're almost 100% margin, given that they're pieces of paper--that leaves $96.3 - 85 = $11.3M in gross profit from selling cars.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#109

Post by [deleted] » Thu, May 23, 2013, 2:26 AM UTC

twistedpair wrote: post #20

andrewtbham wrote: post #9

I own Tesla stock and I'm glad to see this. Tesla has been a highly politicized stock... largely because Mitt Romney and Sarah Palin called it a "loser." My hope is that this will help get rid of that stigma and help them with their image and political battle with dealerships in red states, like North Carolina and Texas. This also removes some strings attached to the DOE loan. For instance, Tesla could be acquired (a…

Don't forget, we tried to make Tesla dealerships illegal first here in Mass. NC was late on that one, so let's not make it a "Red State" matter.

[deleted]

Re: Tesla Repays Department of Energy Loan Nine Years Early

#110

Post by gridspy » Thu, May 23, 2013, 2:41 AM UTC

lclarkmichalek wrote: post #6

snprbob86 wrote: post #4

The subtitle says: "ONLY AMERICAN CAR COMPANY TO HAVE PAID BACK GOVERNMENT" Assuming that's true, I'm not sure whether I should be proud of Tesla, ashamed of our Government, or angered at other car companies. Probably all three...

What's the problem with companies paying back loans when they "need" to (i.e. when the loan comes to an end)?

It can leave you exposed if you're ever forced to pay it back by the government. If the timing is wrong it might be hard to raise the money.