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Green Tesla Motors: Another Day, Another Solyndra

When Tesla's application was before DOE loan managers in 2009, there were many indications it was not even in need of the loan. Tesla’s private investors included Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker, and VC firms Draper Fisher Jurvetson, Capricorn Management, and the Bay Area Equity Fund (managed by JPMorgan Chase). In May 2009, Daimler Chrysler took a stake in Tesla for a reported $50 million. Abu Dhabi’s Aabar Investments reportedly bought 40% of Daimler’s investment.

Tesla is also building powertrain components for the Mercedes-Benz A Class E-Cell all-electric cars, and is working with Daimler on components for its smart car.

That year Tesla was making presentations to potential investors for an IPO. In June of 2010, Tesla officially launched its IPO on NASDAQ, which instantly capitalized the company at $226 million. The IPO underwriters were not small investment houses, but Goldman Sachs, JP Morgan, Morgan Stanley, and Deutsche Bank. The IPO, however, had troubling fine print that the company would discontinue the production of its roadster after only 1,600 vehicles had been built.

The DOE loan was also intended to reconfigure a Fremont car assembly plant partially owned by Toyota. Instead of selling its plant, Toyota became a $50 million partner with Tesla, which could have easily recapitalized the plant.

DOE says they had no inkling of the deals that were in the works when they initially approved the loan, which was announced in June 2009. DOE spokesman William Gibbons tells PJMedia that it was offered "a conditional commitment" in June of that year, but only learned after the issuance of the loan that "Tesla was able to raise significantly more private equity, and made its initial public offering."

However, many financial analysts have seen Tesla economic prospects differently.

On automotive news website "The Truth About Cars," Edward Niedermeyer wrote on February 13, 2009, months before DOE approved the loan:

How on earth is anyone supposed to believe his repeated insistence that Tesla is not in financial trouble?

Motley Fool financial analyst Sean Williams wrote:

I just can't see Tesla turning a profit anytime soon -- if ever! … Current analyst projections call for Tesla to grow revenue by threefold in 2012 with the introduction of the Model S, but call me not so convinced. On countless occasions in recent history, Tesla has run into parts supply delays and technical snafus. Let's just say I wouldn't be shocked to see the debut of the Model S pushed back beyond the mid-2012 date the company provided.

Williams was right. Tesla's Model S is now slated for release sometime at the end of 2012.

Financial analyst Bruce Krasting openly worried about the "free money" being given to the automakers. The loans actually are paid by the Federal Financing Bank, a bank supervised by Treasury Secretary Timothy Geithner. Geithner has doubled the size of the bank and redirected its loans from government projects like rural electrification to private sector projects like Tesla. Geithner has total control over the size and disbursements of the bank. He has no oversight. A congressional committee is investigating the bank connected to the Solyndra scandal. Krasting complained that the bank, once reserved for governmental non-profit programs, was being redirected to for-profit companies like Tesla. In September 2011, Krasting tweeted:

Who got this money? Answer: The same characters that have gotten the "Free Money" since O/Timmy G. took control.