Tesla Makes Advance Payment for the US Loan image

Tesla Motors CEO Alan Musk said he will make the first advance payment of the US Energy Department loans offered to develop and manufacture the Model S sedan.

In June 2009, Tesla qualified for a $465 million US loan and last week Alan Musk said the Energy Department asked for a faster repayment schedule as the automaker plans to increase sales of the $57,400 Model S.

“Far from being worried about our survival, the DOE is highly bullish about our future and doesn’t want us to delay early repayment of the loan if we have the cash on hand to do so. I am happy to announce that we will be initiating an advance payment today to prefund the principal payment that is due in March 2013,” said Musk.

Currently the automaker tries to become profitable from selling cars that work with lithium-ion battery packs. Last week Tesla reduced its target for this year from the initial 5,000 units to 3,225 units. Through the end of September, Tesla has manufactured 359 Model S at the Fremont plant, and delivered more than 250 units. The loan program created in 2008 by President George W. Bush’s administration was used by Tesla, Fisker, Nissan and Ford and it was aimed at increasing US sales of the highly fuel-efficient cars and trucks.