Ernest Moniz, the new head of the Department of Energy, agrees there is a “need” to reopen the $25 billion auto loan program that awarded loans to Fisker, Ford and Tesla, Sen. Debbie Stabenow, D-Mich., said in an interview with the Detroit News.
“We’re working with the department… to get it back on track,” she said. “(Moniz) agrees there is a need. The need’s not gone away.”
The department said last month it is unlikely to use the remaining $16.6 billion in unspent funding for the program, which hasn’t closed a loan in two years, according to a Government Accountability Office report.
“Everybody kind of backed away after Solyndra, even though (the auto loan program) had nothing to with Solyndra,” Stabenow said.
Advanced Technology Vehicle Manufacturing loans were awarded to auto makers developing fuel-efficient cars, a goal right in line with the Obama administration’s plan to get cars and trucks off oil. The DOE made five loans totaling $8.4 billion, and awarded $3.3 billion in credit subsidies, with the last loan awarded in March 2011.
Under the program, Ford received $5.9 billion; Nissan received $1.4 billion; and Tesla Motors and Fisker received about $500 million each, according to the Detroit News.The DOE has since received seven applications for the program, requesting a total of $1.48 billion, but it considers those applications inactive.
Most applicants and manufacturers told the GAO that the costs of participating in the ATVM program currently outweigh the benefits.
Fisker, which was awarded a $529 million loan through the program for its luxury Karma hybrid, is expected to file for bankruptcy as early as this week. The company laid off three-quarters of its employees last week and still owes $192 million on the $193 million it was received. The DOE declined to pay the full $529 loan in May 2011 after Fisker fell behind on its targets.
The federal government has been making loans under similar programs for decades. Under President Clinton’s Partnership for a New Generation of Vehicles, the DOE spent more than $1.25 billion on research and development with little to show for it, as the New York Times noted in 2008.
President Bush replaced the partnership with the FreedomCAR program for work on hydrogen fuel cells and lithium-ion batteries.
In addition to ATVM loans, the Obama administration has also awarded about $15 billion in loan guarantees for 28 projects under its Loan Guarantee Program and billions more in stimulus funds. A growing list of companies subsidized by these loans have failed, including A123 Systems, which supplied the Karma’s lithium ion batteries.
H/T Washington Free Beacon