South Dakota Senator Aims to Eliminate Loan Program for Fuel-Efficient Autos
September 19, 2013 10:55 AM
comment(s) - last by
This is the same program that funded Fisker Automotive
South Dakota's Republican senator wants to terminate
the federal loan program
that gave millions of dollars to
-- an automaker that has failed to produce a car in over a year and is now missing loan payments to the U.S. Department of Energy (DOE).
The Detroit News
, Sen. John Thune (R-S.D.) wants to get rid of the $25 billion Advanced Technology Vehicle Manufacturing loan program due to failures like Fisker Automotive wasting taxpayer money. He has already proposed an amendment that would “permanently end the ATVM program and save taxpayers from paying for more of President Obama’s bad green-energy bets.”
Thune's amendment comes after the DOE said it would auction off Fisker Automotive's $168 million unpaid loan earlier this week. DOE plans to launch the auction in early October.
Fisker Automotive is 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 started looking for a buyer so it doesn't have to claim bankruptcy.
But Fisker isn't the only auto company that failed after receiving money from the Advanced Technology Vehicle Manufacturing loan program. Vehicle Production Group LLC -- which is a Michigan-based startup building wheelchair-accessible compressed natural gas vehicles -- was awarded $50 million in loans back in March 2011, but has since halted production.
Senator John Thune
DOE sold its unpaid $50 million loan for Vehicle Production Group LLC to AM General for $3 million earlier this month. According to The Detroit News, taxpayers lost about $42 million on that sale.
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 the five companies (Fisker and Vehicle Production Group) that received government loans stopped production.
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.
U.S. Energy Secretary Ernest Moniz said last month that the Obama administration is interested in
reviving the $25 billion Advanced Technology Vehicle Manufacturing Program
. He noted that it plans to draw a new round of loan requests (but is not actively considering any applications for retooling loans) and reexamine its lending criteria in order to avoid problems it encountered in the past.
The Detroit News
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RE: Bad Loans
9/19/2013 12:22:12 PM
Testla is the success story here though. It looks like its going to become a pretty big player in the global market and provide lots of US jobs.
RE: Bad Loans
9/19/2013 2:48:08 PM
Then exlain that to me. Also, why is their market cap as large as Fiat with what? 20,000 cars sold each year?
Or why they've never even turned a profit yet according to GAAP accounting.
As much as i like Elon Musks efforts, Tesla's by far not a succes story yet. Maybe in 10 years, if they manage to survive (read: not implode), if they manage to actually bring out that affordable electric car they said they would, and most importantly, if the autosales market holds together,
and the stock market holds together,
No taper mr. Bernake? If he doesn't the fed will own the entire bond market by 2018, game over. If he does, the stock market, and tesla with it, will take a nosedive.
Once again, don't get me wrong, i really hope Tesla makes it and in a decade we're all driving Tesla made sub-$20,000 electric cars. Aside from the who owns what battery problems i was really impressed by their battery swapping demonstration on the model S.
But to call them a succes story, or to even suggest they're in the clear... Is far too premature at best, blatant propaganda at worst.
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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