U.S. to Revive Loan Program That Backed Tesla, Fisker
A U.S. alternative-vehicle loan program criticized by Republican lawmakers for financing two failed startups will resume marketing to industry groups and possible applicants, an Energy Department spokeswoman said.
The $25 billion Advanced Technology Vehicle Manufacturing loan program has about 60 percent of its funding remaining and is open after making no loans since 2011, said Aoife McCarthy, a spokeswoman for the agency that administers the program created in 2008 by President George W. Bush’s administration.
“With no sunset date and more than $15 billion in remaining authority, the program plans to conduct an active outreach campaign to educate industry associations and potential applicants about the substantial remaining funds available and the application process in general,” she said today in an e-mail.
The program was criticized by Republican nominee Mitt Romney during the 2012 presidential election for assisting what he called “losers.” Congress held a hearing in April to look into the default of Fisker Automotive Inc., which drew $193 million from its $529 million loan before ceasing production last year.
“At worst, the program threw good taxpayer money after bad,” Representative Darrell Issa, the California Republican who heads the House Committee on Oversight and Government Reform, said in a statement.
“At best, it has risked Americans’ hard-earned money on projects that didn’t need it or didn’t truly advance vehicle technology. The program simply didn’t have the results needed to justify its revival.”
Demand for low-interest government loans today may not be as high now as it was in 2009 when the auto program opened for applications, said Alan Baum, an independent auto analyst at Baum & Associates in West Bloomfield, Michigan.
“I could see firms that are automotive suppliers that are trying to broaden their position in this marketplace,” Baum said in a telephone interview. The drawback is that private financing is available and inexpensive, he said. “Is this money better than money you can obtain on the private side?”
Applicants would have to be willing to be in the public eye given the scrutiny by lawmakers and government watchdogs, he said.
The Energy Department probably will seek recipients looking for supplements to their capital rather than a main funding source, Baum said.
While backing Fisker and wheelchair vanmaker Vehicle Production Group LLC, which defaulted on its $50 million loan in May, the program also financed Tesla Motors Inc. (TSLA), which in May repaid its $465 million loan in full nine years early. Tesla now has a stock market value of more than $20 billion.
Ford Motor Co. (F) and Nissan Motor Co. received the other two loans and have been making payments. The Energy Department has two other lending programs, including one that provided loan guarantees to failed solar-panel maker Solyndra LLC. The department also issued grants for electric-vehicle battery development through a separate program.
“From Solyndra to Fisker, taxpayers have already paid too much for President Obama’s risky green energy bets,” Senator John Thune, a South Dakota Republican, said in a statement. “Now is not the time to revive defunct Department of Energy loan programs that have already wasted hundreds of millions of taxpayer dollars.”
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