Tesla Motors pays off Department of Energy advanced technology loan

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Joseph C. Cassini drives his 1934 Packard 1108 Twelve Dietrich Convertible Victoria onto the winners platform after being awarded the Best of Show award at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Ben Rehm, 20, of Carmel photographs a 1927 Rolls-Royce Phantom I Murphy Convertible Saloon at the Concours d’Elegance on Sunday. (Bob Chamberlin / Los Angeles Times)

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Mitzy from Salinas takes a moment to rest in the shade of a 1955 Lincoln Indianapolis Boano coupe. (Bob Chamberlin / Los Angeles Times)

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A Duesenberg with a tool kit mounted inside the driver’s door is displayed at the Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Photographer Phillippe Carre takes a picture of a vintage Alfa Romeo. (Bob Chamberlin / Los Angeles Times)

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Julia Binke, 6, walks in front of a 1925 Rolls-Royce Silver Ghost at the Concours d’Elegance on Sunday. (Bob Chamberlin / Los Angeles Times)

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Sporting racing-flag toenail polish, Lori TenEyck of Colorado was one of nearly 10,000 people enjoying the display of about 200 collector cars at the Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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One of the nearly 200 collector cars greets the dawn as it rolls onto the 18th fairway at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Chewing on his cigar, Rick Rawlins drives a 1908 Prince Henry Benz, owned by Ann Bothwell but originally owned by race car driver Barney Oldfield, as nearly 200 collector cars greet the dawn as they roll onto the 18th fairway at Pebble Beach to begin the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Spectators line up to see the nearly 200 collector cars at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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A rumble-seat passenger in a 1933 V-12 Packard at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Wearing a variety of hats, contestants ride in their Rolls Royce. (Bob Chamberlin / Los Angeles Times)

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Adele Tanaka, left, and Jo Yuan capture the moment as the first of nearly 200 collector cars greets the day to begin the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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A 1957 Ferrari 250 GT 14-Louver Berlinetta is on display at the Gooding & Co. auction as part of the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A prospective buyer looks down a line of cars up for auction at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A Shelby 289 Cobra Competition Roadster from 1964 is reflected in the fender skirt of a 1937 Bugatti Type 57SC Atalante at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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At the Concours d’Elegance weekend at Pebble Beach, a 1925 Bugatti Type 35 Grand Prix is on display. (Bob Chamberlin / Los Angeles Times)

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A 1935 Avions Voisin C25 Aerodyne, featuring an early version of a sun roof, is on display at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Sports Car magazine photographer Dave Tomaro photographs prospective buyers as they spend the afternoon ogling vintage and rare automobiles on display at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A Bentley radiator ornament at the Gooding & Company auction tent at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A man uses a camera to get a closer look at the undercarriage of a 1956 Porsche 356 A 1500 GS Carrera Coupe. (Bob Chamberlin / Los Angeles Times)

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Expensive cars are lined up at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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This 1990 Ferrari F40 LM has a pre-sale estimate of $2,000,000 - $2,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1965 Ferrari 275 GTB Long-Nose Alloy has a pre-sale estimate of $2,250,000 - $2,500,000. (Brian Henniker / Gooding & Co.)

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This 1990 Ferrari F40 LM has a pre-sale estimate of $2,000,000 - $2,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1990 Ferrari F40 LM has a pre-sale estimate of $2,000,000 - $2,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1965 Ferrari 275 GTB Long-Nose Alloy has a pre-sale estimate of $2,250,000 - $2,500,000. (Brian Henniker / Gooding & Co.)

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This 1965 Ferrari 275 GTB Long-Nose Alloy has a pre-sale estimate of $2,250,000 - $2,500,000. (Brian Henniker / Gooding & Co.)

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This 1966 AAR Gurney-Weslake Eagle Mk 1 has a pre-sale estimate of $3,000,000 - $5,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1966 AAR Gurney-Weslake Eagle Mk 1 has a pre-sale estimate of $3,000,000 - $5,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1966 AAR Gurney-Weslake Eagle Mk 1 has a pre-sale estimate of $3,000,000 - $5,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1955 Ferrari 250 GT Berlinetta Competizione has a pre-sale estimate of $6,500,000 - $7,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1955 Ferrari 250 GT Berlinetta Competizione has a pre-sale estimate of $6,500,000 - $7,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1955 Ferrari 250 GT Berlinetta Competizione has a pre-sale estimate of $6,500,000 - $7,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1996 Porsche 993 GT2 has a pre-sale estimate of $475,000 - $575,000. (Brian Henniker / Gooding & Co.)

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1956 Porsche 356 A 1500 GS Carrera Coupe has a pre-sale estimate of $650,000 - $850,000. (Mathieu Heurtault / Gooding & Co.)

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This 1964 Porsche 904 Carrera GTS has a pre-sale estimate of $1,750,000 - $2,250,000. (Brian Henniker / Gooding & Co.)

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This 1996 Porsche 993 GT2 has a pre-sale estimate of $475,000 - $575,000. (Brian Henniker / Gooding & Co.)

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This 1964 Porsche 904 Carrera GTS has a pre-sale estimate of $1,750,000 - $2,250,000. (Brian Henniker / Gooding & Co.)

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This 1948 Alfa Romeo 6C 2500 Competizione, No. #002 has a pre-sale estimate of $2,800,000 - $3,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1948 Alfa Romeo 6C 2500 Competizione, No. #002 has a pre-sale estimate of $2,800,000 - $3,500,000. (Mathieu Heurtault / Gooding & Co.)

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This 1957 Ferrari 250 GT 14-Louver Berlinetta has a pre-sale estimate of $9,000,000 - $11,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1957 Ferrari 250 GT 14-Louver Berlinetta has a pre-sale estimate of $9,000,000 - $11,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1957 Ferrari 250 GT 14-Louver Berlinetta has a pre-sale estimate of $9,000,000 - $11,000,000. (Mathieu Heurtault / Gooding & Co.)

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This 1996 Porsche 993 GT2 has a pre-sale estimate of $475,000 - $575,000. (Brian Henniker / Gooding & Co.)

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This 1937 Bugatti Type 57SC Atalante has an inline eight-cylinder engine making around 200 horsepower. Its pre-sale estimate is in the neighborhood of between $9 million and $11 million. (Mathieu Heurtault / Gooding & Co.)

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This rare 1967 Ferrari 275 GTB/4*S N.A.R.T. Spider is one of only ten made, and has been owned by the Smith family since it was new. The family is auctioning it off at RM Auction’s Pebble Beach sale. The pre-sale estimate is between $14 million and $17 million. The family will donate all proceeds to charity. (RM Auctions)

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A 1907 Renault Vanderbilt Racer at the 2012 Rolex Monterey Motorsports Reunion. (Bob Heathcote Photography)

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The 1958-63 formula junior racecars group in a turn at the 2012 Rolex Monterey Motorsports Reunion. (Stephan Cooper / Rolex)

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Vic Edelbrock of Torrance in his 1963 Corvette Z06 at the 2012 Rolex Monterey Motorsports Reunion. (Stephan Cooper / Rolex)

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Shelby Cobras race at the 2012 Rolex Monterey Motorsports Reunion. (Stephan Cooper / Rolex)

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Edelbrock’s rare 1963 Chevrolet Corvette Z06 leads in the Corkscrew at the 2012 Rolex Monterey Motorsports Reunion. (Bob Heathcote Photography)

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Ed Archer prepares to race in a 1915 Ford Model T at the 2012 Rolex Monterey Motorsports Reunion. (Stephan Cooper / Rolex)

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A 1935 Shaw Pirrung in the 2012 Rolex Monterey Motorsports Reunion. (D.M. Troutman / DMT Imaging)

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A racing rim signed by Carroll Shelby, the father of the Cobra, in Lynn Park’s garage. (Bob Chamberlin / Los Angeles Times)

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“If one’s good, two’s got to be better,” Park said of the cars, chuckling. (Bob Chamberlin / Los Angeles Times)

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Park stands beside the second Cobra he ever bought. One of his sons is going to race in it. (Bob Chamberlin / Los Angeles Times)

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Park checks the hoses of a Cobra he will take to Pebble Beach. This particular car is worth about $2 million. (Bob Chamberlin / Los Angeles Times)

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Park opens the garage door in front of one of the Cobras he plans to take to Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Lynn Park with his garage full of Cobra cars. Known in classic car circles as Mr. Cobra, Park has been collecting the marque since he bought his first after getting out of the Army in 1969. The first purchase got him hooked. (Bob Chamberlin / Los Angeles Times)

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Lynn Park keeps his Cobras in his garage in La Cañada Flintridge. He and his sons plan to race race three of them at the Pebble Beach, Calif., event. (Bob Chamberlin / Los Angeles Times)

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“You can’t have any more fun than playing with old cars,” Park said of vintage racing. (Brian van der Brug / Los Angeles Times)

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Lynn Park drives one of his vintage Shelby Cobras around his neighborhood in La Cañada Flintridge. (Brian van der Brug / Los Angeles Times)

By Jerry Hirsch

May 22, 2013 1:46 PM PT

Upstart electric car maker Tesla Motors on Wednesday paid off a Department Energy loan that had become a political hot potato.

Tesla owed the federal government $451.8 million on a loan that was part of a special program to develop alternative fuel vehicles and renewable energy sources.

Paying off the loan “is pragmatic as well as symbolic,” said Jeremy Anwyl, vice chairman of auto information company Edmunds.com.

“There is a nice party going on on Wall Street right now. Tesla is participating. They would be crazy not to pay off the loan,” Anwyl said.

Tesla has raised about $900 million this month in stock and debt offering deals and is expected to raise another $100 million in the coming days.

Its shares have more than double in the last year, helped by the automaker’s first-ever quarterly profit earlier this month and its success selling the Model S electric sports sedan that Tesla makes at a Fremont, Calif., factory.

The Energy Department’s loan program, which includes major automakers such as Nissan’s U.S. division, gained notoriety after the 2011 bankruptcy of Solyndra, the Fremont solar panel maker that cost taxpayers more than $400 million.

Last month, Fisker Automotive of Anaheim defaulted on a similar loan, which could cost taxpayers $171 million.

“When you’re talking about cutting-edge clean energy technologies, not every investment will succeed,” said Energy Secretary Ernest Moniz, “ but today’s repayment is the latest indication that the Energy Department’s portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated.”

The financial troubles at Solyndra and Fisker led Mitt Romney to also include Tesla among a list of “loser” government bets during the presidential election last year. It also made the electric car a popular target among critics of government financial support for advanced technology vehicles and alternative fuels.

“Having a Department of Energy loan after Solyndra and Fisker is kind of an embarrassment these days,” Anwyl said. “Paying off the loan gets Tesla out from under a cloud.”

“I would like to thank the Department of Energy and the members of Congress,” said Elon Musk, Tesla’s chief executive, “and particularly the American taxpayer from whom these funds originate.”

In addition to paying off the loan, Tesla will use the money to expand sales abroad, develop its Model X, a sport utility vehicle, and start work on a less expensive vehicle that would extend its customer base and manufacturing volumes, analysts said.

“What Tesla has accomplished isn’t luck, it’s real,” Adam Jonas, an analyst with Morgan Stanley Research, said in a recent report to investors.

“The Model S is a ... good car,” Jonas wrote. “Each day that goes by where Tesla delivers 60 units without images of flaming Model S’s on YouTube offers incremental validation for what it has accomplished.”

The Model S starts at about $62,000 and can top $100,000, depending on trim level and options. The car is stylish and fast, boasting a zero-to-60-mph acceleration of less than six seconds.

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Autos

Jerry Hirsch

A third-generation Angeleno, Jerry Hirsch covered the automotive industry for the Los Angeles Times. He wrote frequently about consumer and safety issues in the car business and the relationship between the auto industry and the state and national economies. He has a master’s degree from Northwestern University’s Medill School of Journalism. He left The Times in 2015.