Despite criticism by Republican lawmakers, the Department of Energy loan program designed to encourage alternative vehicles is ready to resume.
A total of $15 billion, or roughly 60 percent of the originally allotted $25 billion, remained after loan dispersal stopped in 2011. After two of the five manufacturers supposed by the government loan program failed, and it seemed unlikely that the remaining money would be lent.
Tesla Motors is the only startup to receive money from the loan program that is still running and repaid its $465 million loan nine years ahead of schedule. The company’s stock market value now sits above $20 billion, and serves as an example for program proponents to point to.
With millions in tax dollars already lost on Fisker and wheelchair van maker Vehicle Production Group, Senator John Thune, a Republican from South Carolina, isn’t convinced.
“From Solyndra to Fisker, taxpayers have already paid too much for President Obama’s risky green energy bets,” he said.
But the program might not see the same level of interest as it did initially. Accepting the government loan money means agreeing to a set of pre-determined milestones. Without meeting those marks, the funding is cut off. Tesla’s loan agreement also required matching capital obtained through public offering. Fisker missed critical targets specified in its loan agreement, and funding was cut off.
Tesla CEO Elon Musk was able to steer the company past potential problems, but other businesses might not be so capable. While the government loan certainly helped Tesla, it’s also important to remember that it only accounted for a portion of the money spent to keep the company afloat.
Menawhile, Ford and Nissan both continue to pay down their loans, which were used for the Focus EV and Leaf respectively.
[Source: Automotive News]