The U.S. government’s stalled and controversial green car loan program is getting a makeover, which could unleash its remaining $16 billion in allocated funds. During an event Wednesday, Energy Secretary Ernie Moniz announced that the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which allocated loans to green automakers between 2009 and 2011, will be improved in a few key ways.
First off, the program will now offer loans to vehicle parts makers, as well as automakers, that are making fuel-efficient parts like next-generation engines, new types of powertrains, light-weight auto materials, fuel-efficient tires and even advanced electronics. While the program was already open to those companies, the DOE says it is now clarifying the inclusion. That should be good news for companies like EcoMotors, a startup that is commercializing a fuel-efficient engine in China.
The DOE also says that it will be much more responsive to loan applicants and will offer them a better support system. To that end, the DOE launched a new way for applicants to apply for the program, which the DOE says is easier, faster and delivers quicker feedback.
With these tweaks, it sounds like the DOE is ready to start dolling out more loans. The program, which hasn’t given a loan in three years, was put on hold following controversy with some of its loan-awardees. Most famously, electric car maker Fisker Automotive crashed and burned with hundreds of millions of dollars of their loan unpaid. Chinese auto company Wanxiang ended up buying Fisker’s assets out of bankruptcy. Natural gas van maker Vehicle Production Group also struggled and closed shop with a loan from the program.
But electric car maker Tesla is the poster child of how well the loan program could work. The loan was crucial for the car company in its early years as it transitioned into a larger automaker, and Tesla repaid the loan early last year. Other automakers that used the loans more successfully were Ford and Nissan. The program only gave out five loans between 2009 and 2011 before it was put on ice.
Likely with this refresh, the DOE won’t focus so much on electric cars, but will also fund more traditional, but still eco-friendly, projects and technologies. The DOE said the ATVM loan program has created 35,000 direct jobs across eight states.