The Energy Department Tightened Its Loan Criteria After Fisker Problems image

The problems with the loan offered to Fisker Automotive, made the Obama administration tighten its loan criteria.

According to new documents released by a House committee, the Energy Department has spent years until it offered loans to several green energy companies such as A123, Bright Automotive, Enerdel, Think Global, Next Autoworks and Dow Kokam. Now with the serious problems related to the loan offered to Fisker Automotive, the Energy Department has tightened its loan criteria for the $25 billion Advanced Technology Vehicle Manufacturing Program.

Many startup automakers which wait for the loans have already sent emails expressing their frustration with the Energy Department’s slow pace, the main reason why Chrysler, GM and several other automakers have ultimately gave up their requests after months or even years of talks.

“We are trying to do a much better job of spotting and understanding (applicants) earlier rather than later,” James C. McCrea, an Energy Department consultant, wrote in July 2010 to another consultant. “This is incredibly important, and especially with ATVM as they have not been through the approval process since Fisker and Tesla have no real sense of how much tougher things are.”

There have been 150 applications sent to the Energy Department seeking loans of more than $43 billion. From these only 5 companies received loans values at $8.4 billion. In march the Energy Department said it does not plan to offer more loans from the $25 billion program even if it still has $16.6 billion available and 7 applications waiting for an answer.

Source: The Detroit News