• Jan 24, 2011
To date, only four loans from the DOE's Advanced Technology Vehicles Manufacturing Loan (ATVMP) program have been fully processed: $528.7 million to Fisker, $1.4 billion to Nissan, $465 milion to Tesla and $5.9 billion to Ford. Add them all up, and you get to around $8.3 billion. That might sound like a great amount of money to spur development of cleaner vehicles in the U.S., but if you've been following the ATVMP story, then you know that the program originally had $25 billion to hand out. It's been a long time since we've heard anything about the many, many applications for funds (100 groups applied for over $42 billion), so what's up with the rest of the money?
The Detroit News reports that, in short, it's a mess. Here's a choice quote:

Some applications for the low-cost government loans have languished for more than two years. Projects have collapsed and some small companies are barely hanging on, hoping the money arrives in time. Some loans have taken another seven months to close after being approved.

The ATVMP started in September 2008, and the last big announcement happened in April 2010. There was a fifth award – $50 million to Vehicle Production Group LLC to build a CNG-powered wheelchair-accessible car – but the loan hasn't closed. The Detroit News has obtained letters from members of Congress complaining about the slow pace of the loan process. Most importantly, the DOE might not be able to hand out the entire $25 billion because of higher-than-expected costs.

Problems with the ATVMP have already spawned one lawsuit that alleges bias against small companies. The brief was filed by XP Vehicles (which has an electric inflatable car concept) "on behalf of the independent American alternative energy vehicle manufacturers." It's not just the small companies that are waiting. Chrysler still hasn't heard back from the DOE, but CEO Sergio Marchionne told DN that he hopes the loan will be closed by the end of March.

Of course, some people think not giving out the loans is kind of a good thing.

[Source: Detroit News]



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    • 1 Second Ago
  • 12 Comments
      • 3 Years Ago
      Thankyou DCBrat, for putting all this in perspective.
      My personal opinion is that the large amounts to Ford and GM sound too generous and should be cut back with the idea of spreading this around more. But what's this with mounting costs??? Are they spending $5Billion on themselves just to shuffle some papers? I smell a rat here.
      • 3 Years Ago
      How would an " electric inflatable car concept " be suing for bias?
      It would never pass any safety ratings. Which I'm sure it must in order to qualify.
      What dont people get when we ask them to build an actual car?
      • 3 Years Ago
      It sounds like all the companies with possibly viable products already received their loans. I would not be surprised if the new Congress cuts off the program where it is at to help save the budget. That would seem reasonable.
      • 3 Years Ago
      For once Dan, I agree with you Dan on the CNG car.

      Though, I think that Tesla has lasted this far, they will make it. I think that there will be enough early adopters for the Model S that they will be able to start operating in the black, and then start real development on remainder of their lineup. As far as Fisker, I think that they will find their buyers as well. I believe that their system is much more sophisticated than the Volt, and will be adopted by similar buyers as the Model S, but who are a little more afraid of giving up their engine for a battery. Out of the two though, I think that Tesla has the better odds of surviving.

      I would be concerned about the company filing the lawsuit though. Who in their right mind would design an inflatable automobile?
      • 3 Years Ago
      Government efficiency in action. Is anyone really surprised?
      • 3 Years Ago
      FROM THE TRUTH ABOUT CARS

      The Department of Energy’s $25b Advanced Technology Vehicle Manufacturing Loan program was very nearly used as a slush fund to keep GM and Chrysler afloat during the dangerous days leading up to the federal auto bailout. Though President Bush’s decision to use TARP to rescue America’s failing automakers took away the need to tap the so-called “retooling loan” program to fund America’s auto bailout, that decision also contributed to a long delay in the allocation of the ATVM loans. Because the loans require applicants prove “financial viability,” GM and Chrysler’s requests (which account for $17.4b out of the remaining pool of $16.7b in non-allocated loans) have been on hold, and with them, every other automaker still seeking approval for its requests. And now, with no word from the DOE on the loan program since last April, congress is agitating for the DOE to make with the loans already. Senator Diane Feinstein captures the frustration in a letter published by the Detroit News

      “On multiple occasions, the department has missed internal deadlines for initial decisions, term negotiations, final decisions and loan closure,” she wrote, saying the department failed to give applicants “a clear timeline.”

      But did the DOE miss deadlines and string automakers along out of negligence, or because it had to wait in order to fulfill the loan program’s mission, namely supporting the bailed-out automakers?


      This question doesn’t have an easy answer: after all, few in the private sector expect rapid action from governmental bureaucracies. The slow allocation of federal loans really shouldn’t come as a surprise to anyone. At the same time, the ATVM program has been in place since 2008, and automakers like Ford, Nissan, Tesla and Fisker have jointly received some $8.3b for programs ranging from Tesla and Fisker’s EV luxury car projects to Nissan’s Leaf and more fuel-efficient versions of Ford’s mass-market models. If the DOE could approve billions for non-bailed-out automakers, surely there is nothing out of the ordinary going on with the DOE’s bureaucracy. Curious minds must, therefore, look to pending requests for an explanation of their delay.

      And those requests tell an interesting story. With $8.3b of the program’s loans already spent, GM’s $14.4b request would, if approved, soak up nearly all remaining funds. In response to both this reality and Fiat’s changes to Chrysler’s efficiency priorities, the Pentastar has reduced its loan request from $8.55b to “around $3b.” Had Chrysler not made its request reduction, the two bailed-out automakers would have accounted for all but $1b of the retooling loan program’s funds. Even with that reduction, Chrysler and GM’s outstanding requests amount to some $700m more than the program has left to give out… and that’s not counting the smaller firms still hoping for a piece of the pie, including ZAP, ALTe, Aptera, Coda and more. Or the fact that

      because the costs have been higher than expected, the Energy Department won’t be able to loan the entire $25 billion, Sen. Debbie Stabenow, D-Lansing, said. Auto executives say the agency may only be able to loan another $10 billion.

      The fact that GM and Chrysler are requesting every remaining penny in the ATVM program, combined with delays to the payout of remaining funds sends a fairly unambiguous message: the remaining ATVM money will all be going to GM and Chrysler. Though initial delays to paying out ATVM money to GM and Chrysler were due to the program’s “viability” clause, those concerns were (in theory) circumvented by bailing out those two companies. More recently, GM’s request was “suspended” while it entered the IPO process, an issue that could now be holding up Chrysler’s request. Another concern could be political: with the bailouts still a divisive issue with the American people, the White House may be seeking to delay giving the automakers it owns the rest of the ATVM money as a way of avoiding accusations of political favoritism.

      • 3 Years Ago

      Give $8 Billion to Better Place..

      ..and the US will become an oil free country
      saving the US more than $360 Billion a year
      and the financial devastation
      of an oil controlled US economy.

      http://www.npr.org/2010/12/13/132020612/cost-savings-will-lure-americans-to-electric-cars

      It's going to happen in Israel in a few years..

      ..end of 2011 BPlace EV's
      will be sold with all infrastructure
      (including 51 battery swap stations)
      in place.

      By 2020 Israel will be
      oil independent.

      http://en.wikipedia.org/wiki/Better_Place

      ff
        • 3 Years Ago
        This is an Advanced Technology Vehicles *MANUFACTURING* Loan Program. Better Place doesn't manufacture vehicles.

        Better Place's approach barely makes sense in compact geographic regions like Denmark and Israel. In the USA, constructing battery swap stations every 100 miles on freeways and interstates and stocking them with spare packs would take far more than $8bn. So BP can't solve the range problem of EVs in the USA, and there are millions of Americans with a plug in the garage for cheap recharging who will look at BP's proposal to sell them battery miles, laugh, and ignore it. These are just some of the reasons why *NO* EV coming to the USA is compatible with BP's system.
      • 3 Years Ago
      So it sounds like GM & Chrysler bribed Washington officials to hold all the money for them, cut off their competitors and steal from the taxpayers. Aren't there laws against using taxpayer money for the benefit of one company against another?
      • 3 Years Ago
      If they have a good idea, they don't need no stinkin' loan from the government.

      Private equity would invest.
      If private equity won't invest, it is probably a poor plan or risk. Like Frisker.

      And why should we invest in Nissan ???
      They could easily afford it themselves or raise the money in bond markets if they were that desparate.

      BS loans. Gov losers picking winners and losers with deficit funds.

        • 3 Years Ago
        Haven't you heard? T government has the answers.
      • 3 Years Ago
      not sure what good a loan is anyway. unless you plan to make a run for it.
      a loan only ensures that if it doesn't go as well as plan then you're dead. which might well happen to tesla and fisker.

      and off the top of my head I wouldn't loan 50M$ to a CNG powered handicap car. is that an advanced vehicle... or money sure to be lost.