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As Department of Energy relaunches loan program, we consider past successes and failures

Adam Morath
A tale of two loans.

The U.S. Department of Energy has been both commended and condemned for its $25 billion Advanced Technology Vehicle Manufacturing loan program that launched in 2008 under the Bush administration, with initial funds awarded during President Obama's first term. Opponents of the loan program need only point to the failure of Fisker Automotive for a convenient example of what can go wrong. Supporters of the loans have a reliable retort in Tesla Motors.

Fisker hasn't produced a single Karma extended-range electric vehicle in over a year, has eliminated much of its workforce, and is reportedly receiving buyout offers worth only a small fraction of the automaker's outstanding debt to the U.S. government. The company's $529 million government loan was cancelled in 2012, with roughly $193 million of the loan distributed.

Tesla, on the other hand, has paid back its $465 million government loan ahead of schedule. The automaker's stock price is soaring as its all-electric Model S sedan rakes in awards and sales.

Bloomberg reports that the U.S. government has more than $15 billion of remaining funds to distribute, and they plan on using it. Spokesperson Aoife McCarthy told Bloomberg, "the program plans to conduct an active outreach campaign to educate industry associations and potential applicants about the substantial remaining funds available and the application process in general."

If you read between the lines, that may sound like Uncle Sam pleading "take my money!" but the program hasn't exactly been frivolous with its funds to date. Since 2008, only five companies have received ATVM loans: Ford, Nissan, Tesla, Fisker and The Vehicle Production Group. Other hopefuls, such as Carbon Motors, have been forced to close shop after not receiving a much needed piece of the pie.

Here's a look at the successes and failures of the DOE ATVM loans to date.

U.S. DOE Advanced Technology Vehicle Manufacturing Loans
  • U.S. DOE Advanced Technology Vehicle Manufacturing Loans
  • The U.S. Department of Energy has recently indicated that it plans to distribute the remaining $15 billion in Advanced Technology Vehicle Manufacturing loans to deserving U.S. automakers. Here's a look at the successes and failures of the loan program to date.

    Note: Loan data provided by lpo.energy.gov. Cost per job is calculated by dividing the loan amount by the reported jobs created/saved. (In the case of Fisker Automotive, we divided the loan amount distributed prior to cancelation by jobs created/saved.) In many instances, cost per job does not provide the most accurate or complete index by which the loan should be judged, rather supplies a quick point of comparison for conversation.

  • Ford Motor Company
  • Ford Motor Company

    Loan Amount: $5.907 billion
    Loan Date: April 2009
    Jobs Created/Saved: 33,000
    Cost Per Job: $179,000

    Ford received funds to revamp manufacturing facilities in Ill., Ky., N.Y., Mich., Mo. and Ohio, with an aim to improve fuel efficiency in gas vehicles like the F-150 truck. The DOE claims that the program helped to convert nearly 33,000 employees to so-called "green manufacturing jobs."

    While many factors have contributed to Ford's current financial standing, the company's stock price has quadrupled from around $4 per share when the loan was granted in April of 2009, to roughly $16 at the time of this post. 

    Ford's F-150 truck achieved a combined efficiency rating of 20 miles-per-gallon in 2013, up 20% from 16 miles-per-gallon in 2009.

  • Nissan North America, Inc.
  • Nissan North America, Inc.

    Loan Amount: $1.448 billion
    Loan Date: January 2010
    Jobs Created/Saved: 1,300
    Cost Per Job: $1,113,846

    Japanese automaker Nissan received $1.448 billion in loans to modernize its U.S. manufacturing facility in Smyrna, Tenn. where the company's all-electric Nissan Leaf is assembled.

    "Nissan’s new paint plant will improve energy efficiency by 30% compared to the paint plant it is replacing," according to the U.S. Department of Energy. The DOE also points to Nissan's role in developing U.S. electric vehicle infrastructure as a positive impact of the loan.

  • Tesla Motors
  • Tesla Motors

    Loan Amount: $465 million
    Loan Date: January 2010
    Jobs Created/Saved: 1,500
    Cost Per Job: $310,000

    The DOE awarded Tesla funds in hopes that the niche electric car manufacturer would produce compelling plug-in vehicles, and assist other automakers in doing the same.

    Mission accomplished.

    As Tesla's all-electric Model S sports sedan rakes in awards, accolades, and sales, the automaker has also collaborated with Toyota on their RAV4 EV--the only all-electric crossover vehicle on the market. On top of that, Tesla has already paid back its loan in full, ahead of schedule.

    Despite the company's recent success, some still point to the Model S (which can cost upwards of $100,000) as a toy for the rich. The company's CEO Elon Musk says Tesla plans on unveiling mass-market EVs within the next three to four years

  • Fisker Automotive
  • Fisker Automotive

    Loan Amount: $529 million (Only $193 million distributed)
    Loan Date: April 2010
    Jobs Created/Saved: 300*
    Cost Per Job: $643,333*

    The loan was intended to support the development and production of plug-in hybrid electric vehicles. Fisker did indeed produce an extended-range electric sports sedan known as the Karma in 2011 and 2012, but a series of missteps and bad karma luck led the company to its current sorry state. The automaker missed loan payments, delivered a bricked car to Consumer Reports for testing, lost multiple vehicles to fires and floods, and churned through CEOs and top management

    The U.S. DOE cancelled the loan in 2012, as Fisker failed to meet milestones stipulated by the agreement. Roughly $193 million of the planned $529 million loan was distributed. Rumors are now swirling that Fisker could be sold off for as little as $25 million, while still owing the U.S. government a reported $173 million. 

    Some have speculated that the failure of Fisker led to a freeze on the DOE  ATVM loans. That frost finally appears to be thawing.

    *This number is no longer relevant.

  • The Vehicle Production Group LLC
  • The Vehicle Production Group LLC

    Loan Amount: $50 million
    Loan Date: March 2011
    Jobs Created/Saved: 900*
    Cost Per Job: $55,556*

    Although not as publicized as Fisker, the DOE's loan to The Vehicle Production Group LLC, or VPG, could also be called a failure. 

    VPG started with good intentions. The startup hoped to build a green, handicap-accessible vehicle powered by compressed natural gas. However, the Michigan-based company was forced to shut down operations in May of 2013, just over 2 years after receiving the $50 million ATVM loan.

    *This number is no longer relevant.



[Photo: Tesla/Fisker]


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    • 1 Second Ago
  • 3 Comments
      desta81
      • 1 Year Ago
      Made possible by the same geniuses that brought you digital tv and cash for clunkers. Both of which in my opinion were and are total failures.
      • 1 Year Ago
      As much as I like the Tesla result- My vote is for more gov't funds to basic battery R&D (capacity, price reduction and charge time reduction) then re-fund any critical projects cut down to the bone by the Sequester This program seems to have a big target painted onto it by Fox news. Redeploy the funds effectively elsewhere.
      c.mertz
      • 1 Year Ago
      Hope he has more success that he did with these. $300 million for A123 batteries for 3000 jobs Got 700 jobs. $529 million for Fisker. It didn't reach mileage promised $465 million to Tesla. Has now lost $522 million. $535 million to Solyndra. Now Bankrupt $118 Million to ENER1. Now bankrupt. $43 million to Beacon power. Now bankrupt. $500 million for 80,000 green energy jobs. Got 8000 jobs $186 million for more energy saving jobs. Got 538 jobs. $200 million to create weather insulation jobs. Got 500 jobs