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Tesla pays off $465 million loan nine years early

Posting in Energy

In 2012, it was called a "loser" company by Mitt Romney, but now electric carmaker Tesla has paid off its loan to the U.S. Department of Energy, nine years early.

On Wednesday, Tesla wired $451.8 million dollars to the government to completely pay off the loan with interest.

"When you're talking about cutting-edge clean energy technologies, not every investment will succeed - 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," U.S. Energy Secretary Ernest Moniz said in a statement.

Tesla received the loan in 2009 when the outlook for the automotive industry -- let alone a startup less than a decade old -- was bleak and finding financing for an auto company was a challenge. Tesla used the money to reopen a manufacturing plant in Fremont, California.

And the risk has paid off. The Tesla Model S was named Consumer Report's top-scoring car and, more importantly, the company recently announced its first profitable quarter.

While there are critics of the $34 billion loan program that allowed Tesla and other green energy companies to receive a boost during the recession, the DOE says it's been wildly successful.

“More than 90 percent of loan loss reserve Congress established remains intact, while losses to date represent about 2 percent of the overall $34 billion portfolio," Moniz said.

Tesla paid for the loan with part of the $1 billion it raised from a stocks and notes offering last week.

Photo: Tesla

— By on May 22, 2013, 11:35 PM PST

Tyler Falk

Contributing Editor

Tyler Falk is a freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure