By Joseph B. White
Luxury electric-car maker Tesla Motors Inc. said on Wednesday it has fully repaid a $452 million federal loan it received in 2010, and said it would be able to finance development of its next two vehicles without selling new shares.
Tesla promised earlier this month that it would use some of the proceeds from a $1 billion sale of stock and debt to repay a loan it received during the depths of the financial crisis, when even well-established car makers were scrambling to finance their operations. The company and the U.S. Department of Energy confirmed the repayment on Wednesday.
“Having accepted taxpayer money, I thought we had an obligation to repay it as soon as we reasonably could,” Tesla Chief Executive Elon Musk said in an interview with The Wall Street Journal on Wednesday. “If economics were the only consideration, we would not have done this.”
After repaying the U.S., Tesla has about $679 million in cash. That, plus anticipated cash flow, should be enough to complete development of its next model, a sport-utility vehicle called the Model X, and a third, lower-priced line that could be launched within three or four years, Mr. Musk said.
Completing the Model X, which is based on the Model S, should cost about $250 million. The third-generation car could cost another $1 billion, he said. But he said Tesla could finance the expansion of its model line without further stock sales. “I believe we have enough funding to get all the way to our third generation,” Mr. Musk said.
Tesla currently has 4,500 workers in the U.S. The company used the federal loan mainly to finance the launch of its about $70,000 Model S battery-powered sedan at a former General Motors Co. and Toyota Motor Corp. joint-venture factory in Fremont, Calif.
Mr. Musk said he plans new ways for Tesla owners to rapidly recharge their cars to allow for longer trips between charges. Tesla has indicated in filings with the Securities and Exchange Commission that it is working on a way to quickly swap out the batteries of a Model S and to improve its cars’ recharging speed through a network of “supercharger” stations.
Read more in The Wall Street Journal.