According to U.S. Energy Secretary Ernest Moniz, the administration is considering reviving the moribund $25 billion auto loan program by revising lending criteria and seeking a new round of loan requests.
The Advanced Technology Vehicle Manufacturing Program was created by the U.S. Congress in 2007, but hasn’t made a new loan since March 2011 and came under scrutiny after two of five companies that received loans halted production. In February, Vehicle Production Group LLC – a Michigan-based startup building wheelchair-accessible compressed natural gas vehicles that won $50 million in loans in March 2011 – stopped the production. And we all know the case of Fisker Automotive Inc. who received $529 million in loans but hasn’t been able to build a car since July 2012 and has been searching for a buyer as it tries to avoid bankruptcy.
“We are looking at what a new (loan) solicitation might look like. That’s an ongoing discussion,” Moniz said in an interview. “We are actively looking at what might be an effective new (request for proposals).”
The program gave preference for low-cost government loans to established automakers to retool older plants to build advanced vehicles, but also allowed start-up automakers to take part. The Energy Department has awarded less than $9 billion for auto plant retooling. The auto loan program was created to spur the production of more fuel-efficient vehicles in the United States.
Many companies, including General Motors Co. and Chrysler Group LLC, abandoned their requests, but others performed well: $5.9 billion to Ford Motor Co.; $1.4 billion to Nissan Motor Co.; $465 million to EV startup Tesla Motors, which in May paid off its loans nine years early.