« Law - More on: "Indiana building codes, part of the Indiana Administrative Code, are copyrighted and not available online" | Main | Ind. Decisions - 7th Circuit hears oral argument in Ind company challenge to requirement to include birth control in their employee benefits »

Wednesday, May 22, 2013

Ind. Gov't. - Interesting contrast between two auto company stories [Updated]

A press release today from Tesla Motors announces:

PALO ALTO, Calif.-- Tesla Motors announced that it has paid off the entire loan awarded to the company by the Department of Energy in 2010. In addition to payments made in 2012 and Q1 2013, today’s wire of almost half a billion dollars ($451.8M) repays the full loan facility with interest. Following this payment, Tesla will be the only American car company to have fully repaid the government.

For the first seven years since its founding in 2003, Tesla was funded entirely with private funds, led by Elon Musk. Tesla brought its Roadster sports car to market with a 30% gross margin, designed electric powertrains for Daimler (Mercedes) and had done preliminary design of the Model S all before receiving a government loan.

In 2010, Tesla was awarded a milestone-based loan, requiring matching private capital obtained via public offering, by the DOE as part of the Advanced Technology Vehicle Manufacturing program. This program was signed into law by President Bush in 2008 and then awarded under the Obama administration in the years that followed. This program is often confused with the financial bailouts provided to the then bankrupt GM and Chrysler, who were ineligible for the ATVM program, because a requirement of that program was good financial health.

Also today an AP story reports:
Three former executive vice presidents of a company that planned to build high-tech police cars at an eastern Indiana factory are suing it for more than $600,000 in deferred wages. * * *

[Carbon Motors Corp.] fell apart after the U.S. Department of Energy rejected the company's request for a $310 million loan last year [2012].

This March 7, 2012 IBJ/AP story reported:
Carbon Motors Corp., which hoped to create hundreds of jobs and thousands of high-tech, fuel-efficient police cars in Indiana, announced a major setback Wednesday.

The Connersville-based company said the U.S. Department of Energy has “indicated that it will not proceed with Carbon's $310 million application for a direct loan under the Advanced Technology Vehicle Manufacturing, or ATVM, program. * * *

“We are outraged by the actions of the DOE and it is clear that this was a political decision in a highly-charged, election year environment,” CEO William Santana Li said in a prepared statement. “Since Solyndra became politicized last fall, the DOE has failed to make any other loans under the ATVM program …"

Li said Anderson-based Bright Automotive, General Motors, Chrysler, Next Auto, Aptera all have been hurt by the DOE’s loan process. Bright called it quits late last month after it gave up on receiving a $450 million DOE loan.

"Each of these applicants has been caught for several years in a costly and extensive DOE due-diligence process,” Li said. “Carbon Motors simply appears to be the last victim of this political gamesmanship.”

The company said it had lined up an additional $200 million in loans based on the DOE loan receiving approval.

[Updated at 9:04 PM] And here is a third story, just posted by Politico, reported by Darius Dixon, that begins:
Electric car maker Tesla Motors showed on Wednesday it was no Solyndra, announcing it had paid off the balance of a $465 million government loan — nine years early.

The payment means the company founded by billionaire Elon Musk won’t join Solyndra or Abound Solar on the list of green energy start-ups that collapsed after winning millions from a DOE loan guarantee program. Those loans have been a key target for Republicans, who used them to criticize President Barack Obama’s support for renewable energy companies.

Posted by Marcia Oddi on May 22, 2013 06:53 PM
Posted to Indiana Government