Chrysler and Tesla trade barbs over payback definition

Article by Anita Panait, on May 26, 2013

Chrysler Group LLC and Tesla Motors are trading online barbs over the definition of “payback.” Tesla, which recently sent $452 million to the United States Department of Energy as repayment of its remaining loan with interest, described itself as "the only American car company to have fully repaid the government.” Chrysler, however, begs to disagree.

Four hours after Tesla made the statement, Chrysler issued its own, saying “Not exactly, Tesla.” Tesla's "information is unmistakably incorrect," Chrysler said in a blog post. Chrysler has its point. In 2009, Tesla was granted a federal loan as part of a DOE program to promote advanced vehicle development.

That same year, Chrysler received billions of dollars of loans from US and Canadian governments to avert a possible collapse. Two years later in 2011, Chrysler repaid $7.6 billion in federal loans. Chrysler asked in its blog post, “short memory or short-circuit?"

Chrysler and Tesla are lead by media-savvy chief executives in the personas of Sergio Marchionne and Elon Musk. Many analysts credit Marchionne’s hands-on and outspoken style as critical to Chrysler’s success. Musk, on the other hand, is as fiery as Marchionne. Musk has been more than willing to engage netizens in online arguments or to parade Tesla’s successes. This time was no exception and Musk again made use of social media to defend Tesla’s press release.

In retaliation to Chrysler’s barbs, Musk remarked that Chrysler could not be considered as a US carmaker since it is a division of Italian automaker Fiat, adding that it never fully repaid its loans. He also has a point. The Treasury Department committed a total of $12.5 billion in funds to Chrysler.

The "good" assets of Chrysler back then were used to establish the current company. On the hand, billions of dollars of federal loans were forged into another entity called "Old Chrysler." The US government has already recovered around $11.2 billion of the funds provided to Chrysler. In 2011, Treasury disclosed that it may not fully recover $1.3 billion owed by Old Chrysler.

Topics: chrysler, tesla

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

In Japan, Toyota stays in the limelight by always cooking up something new for its famous 86 sports car. A colour orange Toyota 86 performance edition is one that’s hard...
by - December 4, 2016
Back in 2009, Nissan first introduced the Nissan Leaf, the company’s first all-electric vehicle. LEAF stands for Leading Environmentally-friendly Affordable Family car and this particular EV has been considered as...
by - December 3, 2016
In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries