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25 March 2018 01:43 (South Africa)
Wired World

Who Repaid U.S. Loan First? Chrysler, Tesla Don't See Eye To Eye

  • Reuters
  • Wired World

Chrysler Group LLC and Tesla Motors Inc, both led by media-savvy executives, are trading public jabs over the definition of payback. By Deepa Seetharaman.

Tesla wired $452 million on Wednesday to repay the remaining portion of its U.S. Department of Energy loan with interest. The company described itself as "the only American car company to have fully repaid the government."

Chrysler's snappy rejoinder came four hours later: "Not exactly, Tesla."

In 2009, Tesla won a federal loan as part of a DOE program to promoted advanced vehicle development. That same year, the U.S. and Canadian governments shored up Chrysler with billions of dollars of loans to prevent its collapse.

Chrysler, which is now majority owned by Italian automaker Fiat, repaid $7.6 billion in federal loans in 2011.

Tesla's "information is unmistakably incorrect," Chrysler said in a blog post. "Question: short memory or short-circuit?"

Sergio Marchionne has led both Fiat and Chrysler since 2009 and many analysts credit his hands-on and outspoken style as critical to the U.S. automaker's success.

The same can be said about Elon Musk. Musk, who has been Tesla's CEO since October 2008, regularly uses Twitter to tout Tesla's achievements or spar with electric car naysayers.

Musk took to the social media website on Thursday to defend his company's press release. He said Chrysler could not be counted as a U.S. car company because it is a division of Fiat and said the company never fully repaid its loans.

The U.S. Treasury Department committed a total of $12.5 billion to Chrysler. The "good" assets of Chrysler were used to form the current company, while billions of dollars of federal loans were left to another entity dubbed "Old Chrysler."

The U.S. government recouped about $11.2 billion of its funds. In 2011, Treasury said it is unlikely to fully recover $1.3 billion owed by Old Chrysler.

"More importantly, Chrysler failed to pay back $1.3B," Musk said on Twitter. "Apart from those 2 points, you were totally 1st." DM

Photo: Tesla Chief Executive Office Elon Musk speaks at his company's factory in Fremont, California, June 22, 2012, as the car company began delivering its Model S electric sedan. REUTERS/Noah Berger

  • Reuters
  • Wired World

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