Tesla repays federal loan nearly 10 years early

In Venture Capital as in Government funded economic development, the funding institution goes in expecting many failures but some big winners to make it worth taking the risk.  Tesla Motors just turned the Solyndra myth of government failure on its head with a car that Consumer Reports has said has “performance that is off the charts” and which Motor Trend says is a “game changer”.  This is an example of government partnership with VC and industry to create, in this case 3000 jobs and counting.  A company that is not only introducing truly revolutionary products but also has become supplier to the likes of Toyota as mentioned in a recent CNN Money article:

“Tesla, meanwhile, is financially healthy thanks to good sales of the Model S plus deals it’s reached to supply components to major automakers like Toyota and Daimler as well as sales of electric car credits, earned under California regulations, to other automakers that sell fewer electric cars.”

In a time before venture capital there were two primary ways to get funded for risky ventures; monopoly funded research such as Bell Labs followed by new divisions and/or corporate spin-offs and government funding.  The philosophy behind government funding was that it was the only institution that had the risk tolerance to fund some of the highest risk projects which had high strategic or economic value.  It was recognized that the economic returns could be very large and ripple through the economy in ways that made quality of life better, the economy better, or the country better, often in ways that were hard to directly measure.

It is unfortunate that the funding of Solyndra did not receive better oversight and it is a cautionary tale.  However the lesson is not – “the government can’t pick winners” the lesson is build in better oversight.  There are some who are so desperate to validate the dogma of government as a failed institution that they have a myopic view toward the role government has had in assuring US economic preeminence.  To see this try to name one infrastructure industry that has not had direct or indirect government support.  Examples include agriculture, banking (through, among other things, the home mortgage credit), mining, logging, fossil fuel, rail, auto, trucking (highways are funded by the federal government with taxpayer dollars, no wonder the railroads went broke), construction etc.

Tesla article here:


Lots more on Tesla HERE

This entry was posted in EV PEV, Exciting Technology Breakthroughs, Industry Growth, Markets and Subsidies, Path to a New Paradigm and tagged , , , , , . Bookmark the permalink.

2 Responses to Tesla repays federal loan nearly 10 years early

  1. Pingback: More About the Government Loan Program Made Famous By Solyndra | The Handleman Post

  2. Pingback: Tesla Again!? | The Handleman Post

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