US Department of Energy rejects Carbon Motors’ $310M loan request

Article by Anita Panait, on March 9, 2012

The U.S. Energy Department has declined an application of Carbon Motors Corp. to borrow around $310 million from the department’s Advanced Technology Vehicle Manufacturing program. Carbon Motors had planned to use the financing to develop more fuel-efficient police cars. “We are outraged by the actions of the DOE and it is clear that this was a political decision in a highly-charged, election-year environment," Carbon Motors chief executive William Santana Li said. Carbon Motors’ loan application was endorsed and supported by a number of politicians, including Senator Richard Lugar (R-IN). At least 14 members of Congress wrote to the Energy Department in support of Carbon Motors' application, according to letters provided by the agency. DOE was quick to defend its refusal. "Over the last two and a half years, the department has worked with Carbon Motors to try to negotiate a deal that supported their business while protecting the taxpayers," said DOE spokesman Damien LaVera, noting that the department and the company were not able to come to an agreement on terms “that would protect the taxpayers.” LaVera added that the Energy Department continues to believe that Carbon Motors “is an innovative company with an interesting project.” Carbon Motors suffered the same fate as Bright Automotive Inc., which recently withdrew its $314 million loan application from DOE after waiting for three years for approval. Bright had planned to use the financing to develop electric commercial vans.

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