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The DOE refreshes $16B green car loan program (the one that funded Tesla & Fisker)

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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.

Ray Lane's Fisker Karma

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.

Tesla's Garden State Plaza store in New Jersey

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.

4 Responses to “The DOE refreshes $16B green car loan program (the one that funded Tesla & Fisker)”

  1. @D
    Industry may know best, but shareholders only let organizations take so much risk in developing new technologies. That leaves Universities and governments as the main backers of high-risk endeavors.

    Here in the US, it worked for the Internet, semiconductors, aerospace, etc. and the US industry enjoyed the benefits.

    Nowadays, most other advanced countries invest in their future (ex. China, Brazil, Germany, you name it), so we have a choice in the US: embrace a pure vision (industry=good, government=bad) (turning our backs on what worked in the past) (and just be left behind), or continue to use every tool available to develop new technologies and foster market leadership for our industry.

  2. D Hambley

    Supply-and-Demand is the BEST mathematical tool to determine what products people want, NOT bureaucratic government market manipulation. Does everyone really want the government to take YOUR tax money, spend 1/3 of it on internal bureaucracy and then give the remaining 2/3 to someone else so he can buy an electric car? If the price of an electric car compared to a IC car is lower than the fuel cost savings, then the market will buy electric cars. Why is that simple concept not understood by advocates of government market control?

    • RedHorse

      When the market is controlled by a few players (oil based Big 3) supply and demand breaks down. The government’s loan program (while not always successful) served to perturb and mutate the existing paradigm to create a novel technologically superior offspring (Tesla). With respect to promoting electric car adoption, well…go for a test drive and find out for yourself what the excitement is all about. It’s time to leave the 2012 election rhetoric behind in the dust.