Bid to widen scope of DOE loan program is facing obstacle

Article by Anita Panait, on September 9, 2013

Proposals by the Democrats to broaden the scope of the Department of Energy's Advanced Technology Vehicle Manufacturing loan program are facing a hurdle in Congress in the form of opposition from the Republicans. The DOE said last week that it was planning "an active outreach campaign" for loan program for advanced cars, which was set up in 2007 to spark the development of plug-in hybrid and electric vehicles.

According to the DOE, it still has over $15 billion on hand to lend to qualified applicants under the program, which is currently limited mostly to makers of light duty passenger vehicles or their components.

Democratic Senators Debbie Stabenow and Ron Wyden, who is the Democratic chairman of the Senate energy committee – have introduced a bill to enable parts makers further down the supply chain and manufacturers of efficient medium and heavy duty trucks and buses to be eligible for the loan program.

Stabenow remarked that the program has helped American companies retool their plants to “create new high-tech products and new American jobs,” allowing them to bring jobs back from Mexico.

Without expanding the scope of the loan program, it remains unclear whether it would attract companies aching for some special funding.

The DOE promised over $8 billion in funding to five companies between 2009 and 2011, including a $5.9 billion-loan to Ford, a $1.5-billion funding to Nissan and $465-million financing to Tesla.

Although Tesla has repaid its loan earlier this year, failures of the loan program were making more noise that its successes.

For instance, Republicans chided this spring the department for its failure to scrutinize Fisker Automotive, plug-in hybrid sports car maker that is currently struggling to both find an investor and repay almost $200 million in government loans.

The DOE pledged Fisker a $529 million loan, but it froze the carmaker’s credit line in mid-2011. The department recently placed for auction its non-performing loan to the collapsed Vehicle Production Group LLC, which received almost $50 million in loaned money.

Topics: united states

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