As I noted in my earlier post in this thread, I'm glad that the taxpayers got their money back. That doesn't mean that the loan was a good idea.

 

Enough to keep the girlie happy with a new purse and some shoes

 

Any loan that gets repaid with interest, prior to the end of the term is a good idea. But I am not an expert in these things, I just like to keep things simple.

 

But that interest rate is way lower than typical loans. I was just reading an article the other day that mentioned that some of Tesla's DoE loans were even under 1%, just like many of the other DoE advanced tech loans. Funny that happens when US Treasury 10yr bonds are yielding 3.3% when Tesla got its guaranteed $465 million back in 2010. The interest paid is a tiny fraction of the fair market value of loaning out that money.

Focusing on interest repayment also ignores the big picture - that many of the DoE green program loans have failed. Just because Tesla managed to pay back loans doesn't mean that the green program loans were a good idea. Anyone can go to Vegas right now and hit the tables and happen to win money. The mere outcome of a given person winning money doesn't make the decision to gamble a good idea.

As I said, I'm just really glad the taxpayers got their money back. Tesla doesn't make money selling its cars (double-digit negative % operating margin), so it's best that the taxpayers are free of this risk and the bad decisions of legislators.

I agree that it often works to look at economics simply, but sometimes the issues are much more complex.

 

Fair enough, actually I agree with everything you stated. I wonder why they didn't charge more interest? Seems like risk should match the reward, not like the companies that got the loans would not agree to a decent or fair interest rate.