Obama Admin Looks to Restore $25B Advanced Technology Vehicle Loan Program
August 27, 2013 12:33 PM
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The administration is actively looking at a new round of loan requests
The Obama administration is looking to bring the $25 billion auto loan program back to life in an effort to reach its goal of putting 1 million plug-in electric vehicles on the road by 2015.
According to U.S. Energy Secretary Ernest Moniz, the Obama administration is interested in reviving the Advanced Technology Vehicle Manufacturing Program, where it plans to draw a new round of loan requests.
“We are looking at what a new (loan) solicitation might look like. That’s an ongoing discussion,” Moniz said. “We are actively looking at what might be an effective new (request for proposals).”
The administration is also looking to reexamine its lending criteria in order to avoid problems it encountered in the past.
For instance, the program used to favor low-cost government loans to established automakers (and even startup automakers) to retool older plants for the development of advanced vehicles. But Moniz confirmed that the U.S. Department of Energy (DOE) is not actively considering any applications for new retooling loans.
The Detroit News
, The DOE has awarded less than $9 billion for auto plant retooling.
The Advanced Technology Vehicle Manufacturing Program was created by Congress in 2007 in an effort to reach the goal of 1 million EVs on U.S. roads by 2015, but the program hasn't made a new loan since March 2011. This is mainly due to the fact that two of five companies that received government loans stopped production.
One of these failures is Fisker Automotive, an auto startup that received $529 million in
back in April 2010. However, Fisker fell a little behind on its production schedule, and in May 2011,
DOE froze the loans due to "unmet milestones."
Fisker had only drawn $193 million of it at that point. It hasn't been able to build a car since July 2012, and is currently looking for a buyer so it doesn't have to claim bankruptcy.
Another failure was Vehicle Production Group LLC, which is a Michigan-based startup building wheelchair-accessible compressed natural gas vehicles. It was awarded $50 million in loans back in March 2011, but has since halted production.
Last month, a House Appropriations Committee’s panel voted to cut the remaining funds in the $25 billion Advanced Technology Vehicle Manufacturing loan program.
The Obama administration received a lot of flak for these failures, but the program wasn't all bad. The other three loans -- $5.9 billion to Ford, $1.4 billion to Nissan and $465 million to EV startup Tesla Motors -- proved to be successful. Tesla even managed to pay its full sum back
nine years early
, which was a great feat for a startup.
Moniz said that 1 million EVs on the road by 2015 may not be doable at this point, but could happen in 2016 if EV production continues. Also, he mentioned that 100,000 plug-in vehicles in 2013 could be possible.
The Detroit News
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RE: LOOOOL :)))
8/28/2013 4:15:57 AM
Well, I'm certainly glad you're not handing out the money. Yes, Tesla did well, but that couldn't have been foreseen ahead of time. Certainly, considering the stock price at the time, few foresaw it.
The point of a program like this is to spread your bets around. Actually that tends to be a good investment strategy in general. No one has access to all of the information, and predicting the future can be difficult, so even the savviest of investors will end up making a mistake from time to time. Even the best VCs no doubt have some duds that never end up paying off.
Look how stupid Rhode Island was by giving most of their small business loan money to Curt Schilling who flushed it down the toilet.
put all your eggs in only one basket.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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