Tesla, which received US$465 million ($565 million) in United States Energy Department loans to develop and build electric cars, will repay the funds five years ahead of schedule in a plan approved by the government.
The carmaker said in its annual report that the department approved amended terms of the loan agreements that enable it to complete repayment by December 2017. Starting in 2015, the Palo Alto, California-based company will make accelerated payments from excess free cash flow, chief financial officer Deepak Ahuja said.
"Any remaining balance that's there at the end of 2017 we'll pay off as a balloon payment," Ahuja said.
The maker of battery-powered Model S sedans, led by billionaire Elon Musk, has a goal of becoming profitable this quarter, with deliveries of the vehicle forecast to rise to a record 20,000 units in 2013. Production snags in last year's second half boosted operating expenses and triggered a wider fourth-quarter loss for Tesla than analysts anticipated.
The original terms required repayment of the loans by 2022, 10 years after the funds were drawn down. Tesla said on September 25 that it was working with the Energy Department on a modified repayment schedule.
Amended terms of the loan agreements were registered on December 20 and March 1, the company said.