DoE Resuscitates Tesla-Backing Loan Program
The Department of Energy’s Advanced Technology Vehicle Manufacturing loan program — the same one that helped Tesla make a name for itself — is returning after a hiatus that has been ongoing since 2011.
Last week, the DoE said it was planning “an active outreach campaign” for the program, and noted that it had more than $15 billion ready to hand out to the right applicants. But after two Democratic senators introduced a bill to expand eligibility further down the manufacturing supply chain, questions remain as to how long the program will survive now that it’s been brought back to life.
Currently, the majority of the program is limited to light passenger vehicle manufacturers and those who manufacture their components. The bill would not only reach out to applicants further down the supply chain, but it would also grow to encompass makers of efficient medium and heavy duty trucks and buses as well.
“This program has helped American companies retool their plants to create new high-tech products and new American jobs, including helping companies bring jobs back from Mexico,” said Senator Debbie Stabenow, a Democrat from Michigan who introduced the legislation alongside Ron Wyden, the Democratic chairman of the Senate energy committee.
The original program came under fire as a point of contention in last year’s presidential campaign between Republican nominee Mitt Romney and President Obama. Despite being created by President George W. Bush in 2008, Romney criticized Obama’s support of what he called “losers,” pointing to companies such as Fisker Automotive, which drew $193 million from its $529 million loan before defaulting on their loan last year.
Now, as Democrats in Congress seek to widen the program’s scope, it would seem that Republicans on Capitol Hill haven’t forgotten this, and are reaffirming their position by likening the program’s support of companies like Fisker to Democrats’ support of the failed solar-panel startup, Solyndra, which was also funded by a DoE lending program.
“From Solyndra to Fisker, taxpayers have already paid too much for President Obama’s risky green energy bets,” Senator John Thune, a South Dakota Republican, said in a statement.
And Thune isn’t the only one who has vocalized his opposition to the program. Representative Darrell Issa, the California Republican who heads the House Committee on Oversight and Government Reform, said in a statement that, “At worst, the program threw good taxpayer money after bad. At best, it has risked Americans’ hard-earned money on projects that didn’t need it or didn’t truly advanced vehicle technology. The program simply didn’t have the results needed to justify its revival.”
But that hasn’t stopped the program thus far. Although the question remains of how much traction the DoE will get without expanding the program’s parameters, particularly if applicants are held to higher financial standards than they have been in years past.
As the political debate plows forward, the real question remains as to whether the DoE’s choice of recipients will be another Tesla or another Fisker. Unfortunately, placing a winning bet is easier said than done. The program has already doled out loans to automotive giants including Nissan ($1.6 billion) and Ford ($5.9 billion), both of which are on track to repay their loans, but don’t represent the Cinderella story that Tesla has boasted either.
Although Tesla was able to pay back their load a full nine years ahead of schedule this May, the majority of the attention has fallen on the program’s failures.
Some automakers, such as Chrysler, have abandoned their pursuit of a DoE loan altogether, claiming that they were discouraged by the government’s slow loan process.
“DoE’s in a really tough spot,” says Ryan Fitzpatrick, a policy adviser for think tank Third Way’s clean energy program. “They’re operating with a limited amount of financial tools.”