Tesla spared from raising equity to match federal loans
Tesla Motors, recent recipient of $465 million in low-cost federal loans via the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing program, won’t have to raise new matching funds to qualify like other recipients. Instead, it says it will dig into its revenue from car sales and its 10 percent stake sale to Daimler (estimated at $50 million) to hit the equity mark needed to get the loans.
During yesterday’s showroom opening, the San Carlos, Calif., company’s vice president of business development explained that Tesla will dip into the government loans only as costs arise. $365 million is already earmarked for production of the Model S sedan, to be released by the end of 2011 (two locations in southern California have been scouted for the assembly line with an announcement forthcoming). The other $100 million will go toward a new powertrain manufacturing plant in the San Francisco Bay Area. And with its new millions, Tesla says it anticipates crossing into profitability this month.
The company had originally applied for federal support through the loan guarantee program (another creation of the stimulus bill). It decided to re-file its application with the advanced vehicles program because it was looking for broad corporate support instead of specific project financing.
Tesla has raised almost $200 million to date and is seemingly putting the brakes on raising more venture capital for the forseeable future.
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About the Author, Camille Ricketts
Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.
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