Speaking alongside Steven Chu at the Advanced Research Projects Agency for Energy’s annual summit outside of Washington, D.C., Elon Musk, the CEO of Tesla Motors, confidently declared that his company, which received a $465 million loan from the U.S. Department of Energy, is a success story, and said the company would repay the loan in half the time it is required to. The loan is due by the end of the decade.
Tesla received a loan under the Advanced Technology Vehicles Manufacturing loan program. The loan enabled Tesla to retool an old automotive plant in California to produce the electric Model S. In last week’s quarterly earnings call, Tesla reported that it hit production-rate targets for the vehicle and saw a big increase in revenue, despite losing nearly $90 million for the quarter and $400 million in 2012.
Chu, the outgoing energy secretary, also defended the federal loan program, which has been harshly criticized since Solyndra, a solar panel manufacturer, went bankrupt after it received a $528 million federal loan and wasn’t able to repay the money.
Chu said that Ford and Nissan also received loans under the ATVM program, and he expects those loans to be repaid. He estimated that the $6 billion Ford loan saved 35,000 jobs.
Not all the ATVM loan recipients have done well, though. Fisker Automotive failed to meet milestones under the loan program, and stopped receiving loan money as a result. Overall, the DOE has awarded more than $8 billion in loans under the program.
Despite Musk’s declaration of success, however, Tesla is not yet profitable. Although its revenues have increased, its costs are still high. The margins reported last week were worse than what analysts expected, and Tesla’s stock price plummeted.