The Obama administration is considering reviving the Department of Energy’s auto loan program, which may open loans for automotive suppliers.
The Advanced Technology Vehicle Manufacturing Program was created in 2007 by Congress to help spur the development of more fuel efficient vehicles. A loan hasn’t been made since 2011, and the program came under fire after two out of the five companies given money halted production.
A total of $8.4 billion in loans have been given by the program, and Energy Secretary Ernest Moniz says that about the same amount remains, and could potentially be loaned out. Moniz says that auto parts suppliers may be included in the program, but ultimately “we are open to good ideas,” he said.
Initially, the program favored lending money to established automakers to retool plants that would be used to build fuel efficient vehicles, but small startup companies were also included. Now, after hundred of applications for loans from suppliers have been rejected, Moniz says the DOE is open to the idea of supplier loans.
Two of the major loan recipients were startup companies, and both floundered and eventually halted production. Fisker Automotive, a builder of electric and range-extended cars was granted $529 million, while Vehicle Production Group LLC, which produced wheelchair-accessible compressed natural gas vehicles, received $50 million.
Some loans however have done well, including the $5.9 billion loan to Ford, $1.4 billion to Nissan and $465 million to Tesla Motors.
[Source: Detroit News]