Elon Musk, the chief executive of Tesla Motors Inc., rejected concerns that that electric automaker is experiencing financial troubles. Musk noted that Tesla was making an advance payment on the US federal loan used to develop and produce its Model S sedan. Last week, Tesla reduced its revenue target for the full year 2012 due to the slower-than-expected rollout of the Model S.
At the same time, Tesla announced that it was raising $150 million through a share offering. Tesla likewise announced last week that it had fully drawn down its $465 million U.S. Department of Energy loan facility, and the loan agreement had been amended to defer the repayment of a fraction of the funds. Tesla agreed to make additional early payments starting 2013 and said it would collaborate with DOE officials to draft an early repayment plan.
Republicans have disparaged the Obama administration for the DOE’s support of new-technology firms, citing the difficulties of electric carmaker Fisker and electric battery maker A123 Systems Inc., and the collapse of solar panel maker Solyndra.
During the presidential debate Wednesday night, Republican nominee Mitt Romney grouped Tesla with Fisker and Solyndra, calling them "losers." Musk, in a blog posted prior to the debate, remarked that misconceptions had surfaced after Tesla’s disclosures.
Tesla’s CEO said he wanted to correct the media's "wrong impression" that Tesla was in financial trouble. In the blog, Musk said they only described a relatively pessimistic scenario for Tesla, and that was incorrectly interpreted as the most possible scenario.
Musk defended the raising of funds through share offering, saying it was for risk reduction. He disclosed that the electric carmaker was on the verge of becoming cash-flow positive by the end of November.
Tesla’s CEO added that the company would not have to spend any of the fresh funds until it commences a major new vehicle program.