Skip to comments.The DOE Restructured Its Loan to Tesla [Elon Musk's green car]
Posted on 10/11/2012 2:37:20 AM PDT by Cincinatus' Wife
Imagine that. Weeks to go before the election and the Department of Energy has restructured its $465 million loan to the electric-car company to make sure it didnt run out of cash. The New York Times reports:(Emphasis mine)
"As it ramps up sales of its sleek electric sedan, Tesla doesnt appear to be much of a loser right now. But a closer look at companys cash flows suggests it is hardly out of the woods.
For young companies like Tesla, calibrating cash flows is critical. Customer demand may be high for a companys product,but mistimed spending can lead to a cash crunch. And Tesla has been spending heavily to set up production as well as acquire the parts that make up the new sedan,called the Model S. The specter of cash problems returned last week.The federal government eased terms of its $465 million loan to Tesla to ensure the company didnt breach key financial hurdles. The company then raised $193 million in a secondary stock offering, easing cash concerns........
First, it seems as if Tesla was running very low on cash in the third quarter. It said that, after the stock offering proceeds and drawing down the last $33 million of the federal loan,it had cash in hand of $293 million at the end of September. Another way of looking at the situation is that Tesla had $67 million of cash before it drew down the loan and did the offering. Thats not a lot for a company that has been consuming $120 million of cash a quarter this year. That figure combines the cash consumed by Teslas basic operations,as well as outlays for plant.
Teslas CEO has said he raised the $193 million simply for risk reduction.
Yeah. Its called the risk to Obama of Tesla running out of cash right before the election.
(Excerpt) Read more at nationalreview.com ...
Tesla has even more questionable connections:
Tesla brings political pull, as well. A former Tesla board member, Steve Westly, is an Obama bundler who raised hundreds of thousands of dollars for the president in 2008 and for his 2012 re-election campaign. His Westly Group was also a financial supporter of Tesla Motors until Tesla went public in 2010, and Westly continues to back the company.
Teslas founder and CEO, Elon Musk, is a hearty political contributor who has primarily backed Democrats, including Obama. According to published reports, another Tesla investor is Nick Pritzker, a donor to Obama and a cousin of Penny Pritzker, the national finance chair of Obamas 2008 campaign.
I guess taxpayers these days are expected to subsidize a $109,000 car.
"........Musk, best known as co-founder of the company that became PayPal, is Chairman of SolarCity and CEO of Tesla. According to the Center for Responsive Politics, SolarCity spent $535,000 in 2009 and 2010 to lobby Congress and the Department of Energy on climate legislation, the Recovery Act, green workforce training and development, and provisions in various legislation relevant to solar development. SolarCity has sought to extend a program, due to expire at the end of 2012, that delivers to manufacturers an upfront cash grant in lieu of a 30 percent Investment Tax Credit (called the Section 1603 grant program). So far, according to DOE reports, SolarCity has received more than $66 million from that program.
The company also won a partial guarantee from DOE of a $344 million loan that will place up to 160,000 rooftop solar installations on military housing across the country..........." Source to more sources.
Yes - and regulate our affordable legacy transportation/energy industries to death - literally drive/dictate prices so high that "green" is competitive. Oh, and then Musk has all those "carbon credits" he can sell to make more money. Oh, and once the "deal is done" on his subsidized companies (Tesla, SolarCity, SpaceX) he takes them public and the money flows to him and his extended family (all made possible by the taxpayers and environmentalist/EPA dictates).
These people won’t stop until we stop them.
The Tesla car is a cool college hack: “Hey, let’s take a thousand laptop batteries and see what kind of a sports car we can make out of it!” But most college hacks don’t get half a billion dollars of public funding on the chance that their product will be a big seller when priced at over $100K.
Mostg you folks might think that "S" stands for sedan; but it don't.
It stands for SUCKER!!!
Ah, well... "From each according to the level of coercion we can bring to bear, to each according to their usefulness to us."
".....Just before leaving public office in 2001, Gore reported assets of less than $2 million; today, his wealth is estimated at $100 million.
Gore charted this path by returning to his longtime passion clean energy. He benefited from a powerful resume and a constellation of friends in the investment world and in Washington. And four years ago, his portfolio aligned smoothly with the agenda of an incoming administration and its plan to spend billions in stimulus funds on alternative energy.
....In last weeks presidential debate, Romney criticized the $90 billion that went to promote green technology, saying a number of businesses owned by Obama campaign contributors were winners.
....Gore, 63, divides most of his time now between his home in Nashville and a St. Regis tower apartment in San Francisco, where he can visit his West Coast investment partnership and see his new girlfriend, an environmental activist. (He and his wife of 40 years, Tipper, separated two years ago. She lives in the $8.9 million mansion they bought in 2010 outside Santa Barbara.)
....Gore had won a Nobel Prize and Oscar for his 2006 book and movie, An Inconvenient Truth. Supporters had begun hailing him as the single most effective spokesman on the threat of climate change. With his prize winnings, Gore created the Alliance for Climate Protection, an advocacy group that ran ads warning of looming climate change. In the process, he gained high-placed admirers and business associates in Silicon Valley.
Gore entered the investment world full time by co-founding Generation Investment Management, a London-based investment firm. He was the type of high-profile partner sought by Goldman Sachs executive David Blood, who had headed Goldmans $325 billion asset management division and was looking to start a new firm. The pair launched GIM in 2004 to back companies focused on sustainability, including clean energy, water scarcity and poverty....
....Gore also found himself to be a sought-after star among elite Silicon Valley investors. In late 2007, he became a senior investment partner at one of the worlds most successful venture capital firms, Kleiner Perkins. He was combining forces with longtime friend John Doerr in a joint mission to spur clean tech.........
As Obama was preparing to take office, it was clear his public agenda supporting clean energy aligned with Gores personal agenda. Obama held a highly publicized meeting with Gore at transition headquarters in Chicago to talk about energy policy. Later, Obama closely echoed several of Gores talking points and his plan for public investment in clean energy. Obama even adopted Gores campaign catchphrase for the effort, Repower America.
This is a matter of urgency and national security, Obama said. We have the opportunity now to create jobs all across this country in all 50 states to repower America, to redesign how we use energy and . . . make us competitive for decades to come even as we save the planet......
Gores investments coincided with the governments largest investment in clean tech. A full 10 percent, estimated at $80 billion to $90 billion, of the 2009 stimulus package was devoted to clean energy.......
....Rep. Fred Upton (R-Mich.), who chairs the Energy and Commerce Committee and is a leading critic of clean tech funding, said Gores portfolio is reflective of a disturbing pattern that those closest to the president have been rewarded with billions of taxpayer dollars . . . and benefited from the administrations green bonanza in the rush to spend stimulus cash........"More
SEPT 2009 - “Gore-Backed Car Firm Gets Large U.S. Loan”
“WASHINGTON — A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.....”
"....."The offering would catapult Musk, 40, into the ranks of the worlds billionaires. He owns a 26 percent stake in electric-car maker Tesla Motors Inc. worth more than $650 million as of yesterdays market close, after adjusting for collateralized shares. His 25 percent stake in SolarCity would be valued at $375 million at the valuation the company is seeking.
.........Musk owns more than 70 million shares of closely held rocket maker Space Exploration Technologies Corp., also known as SpaceX. Recent transactions in the private market have pegged his stake in the company at about $875 million.
SolarCity was founded in 2006 by brothers Lyndon Rive, the companys chief executive officer, and Peter Rive, chief operations and technology officer, Musks cousins.
The companys projects are financed with partners including Google Inc. and Citigroup Inc. SolarCitys backers include Mayfield Fund, Draper Fisher Jurvetson, DBL Investors and Al Gores Generation Investment Management LLP........." Source
Tesla is in trouble with Feds because they own their 10 dealerships.
Not allowed for manufacturer to do so.
“As per National Automobile Dealers Association, the electric car manufacturer Tesla has broken franchise law in several states by selling cars through factory stores. 48 states have franchise laws that forbid or restrict the ability of automakers to sell vehicles directly to the public. That is the reason the dealerships are likely to be owned and operated independently. Meanwhile Tesla showrooms are owned by Tesla itself. Unlike the typical dealers, Tesla has a network of stores and retail stores. Although reservations can be made for a new Model S or Roadster at the retail store, according to Tesla the other versions of the store just share information about Tesla vehicles but for sealing the deal Tesla staff direct the potential customers to make their reservation online.
Most of these stores happen to be in shopping malls and Tesla affirms that they are not sales facilities. The dealers however are not buying it. They insist that even if the Tesla staff does not technically sell the vehicle on site, they are doing everything that a traditional dealership would do, thereby asserting that Tesla showrooms are indeed performing sales. Dealership association and networks throughout the country are doubling down their efforts to make Teslas OEM showroom network illegal. Tesla has opened 17 stores in 10 states, also in the District of Columbia.
Apart from that it is looking forward to open another six this year. The Tesla showrooms in four states, Illinois, Massachusetts, New York, and Oregon have till date been questioned on illegality. Since the franchise laws vary in different states, each case in different. In Illinois Secretary of State has informed Tesla that it is illegal to list CEO Elon Musk as the owner of its Chicago store. The Greater New York Automobile Dealers Association is looking into legal options against Telsas Westchester store, in addition to two others in New York. It will be interesting to see the outcome of this issue, will Tesla eventually give up and change to traditional dealerships or will it change the way that state laws are written; only time will tell...”
Carries 2 adults
240 mile range on a charge
14 hours to charge -- but there are no charge stations except for in your garage
Night life potential: 0
Replacement battery: $14,000
SpaceX satellite loss is a warning for ride sharers For the second time this year, a commercial space freighter has docked at the International Space Station. The successful arrival of SpaceX's Dragon cargo vessel is a fresh shot in the arm for privately funded space flight - but there's a catch.
The mission moved forward at the expense of an Orbcomm communications satellite, which was riding in the "trunk" of the Falcon 9 rocket. An engine failure on the way up meant that the satellite was released in too low an orbit, and some industry experts think the stranded probe has now re-entered Earth's atmosphere. (Update: Orbcomm has confirmed that the satellite has deorbited.)
The episode provides a salutary lesson for space entrepreneurs hoping to launch small satellites as secondary payloads on Falcon 9 flights. Emerging commercial space-flight firms such as Planetary Resources, the wannabe asteroid miners, believe such ride shares will be one economic way to deploy their constellations of rock-spotting telescopes and deep-space probes.
But as the name suggests, secondary payloads will take a back seat to the primary mission, SpaceX has confirmed. That's especially so when the main mission involves approaching a crewed spacecraft like the ISS, where safety is paramount.
The Orbcomm loss comes on the heels of a SpaceX presentation on secondary payloads given last week at the International Astronautical Congress in Naples, Italy. There, mission manager Dustin Doud gave a paper on the dedicated payload bay beneath the Dragon capsule and what people can expect from a secondary satellite launch............"