The Department of Energy (DOE) plans to relaunch its ATVM loan program, reports Angela Greiling Keane of Bloomberg. The Advanced Technology Vehicle Manufacturing (ATVM) loan program was launched by former President George W. Bush in 2008 to to boost low carbon energy technologies. However, Republicans have widely criticized the alternative vehicle loan program that backed Tesla Motors Inc. (NASDAQ:TSLA). Republican lawmakers including Mitt Romney argued that the program was being used to finance only “losers” or failed start-ups.
ATVM’s only star-kid is Tesla
The DOE has provided no loans under its ATVM program since March 2011. But Energy Department spokeswoman Aoife McCarthy said that the agency will start promoting the program to potential applicants and industry groups. About 60% or $15 billion of funds allotted to the program still remain with the DOE.
The ATVM program came under widespread criticism, especially by Republicans, after two start-ups financed under the program failed miserably. Fisker Automotive Inc. raise $193 million through the program, but collapsed last year. Another company, Vehicle Production Group LLC, failed to repay a $50 million loan in May. However, Elon Musk-led Tesla Motors Inc. (NASDAQ:TSLA) also received funding through the program. But Tesla Motors Inc. (NASDAQ:TSLA) repaid its entire loan in May, nine years in advance.
ATVM no longer a main funding source?
Analysts believe that the demand for low-interest government funding has diminished compared to 2009, when applicants started seeking auto loans under the ATVM loan program. Moreover, a company that wants an ATVM loan will be in the public eye because of intense scrutiny by federal watchdogs. Bloomberg says that the Department of Energy will position the ATVM program as a supplement instead of the main funding source.
General Motors Co. (NYSE:GM) and Chrysler Group LLC have also received funding through ATVM, but they ceased their green vehicle projects later. Two other companies to receive ATVM funding are Nissan Motor Co. Ltd. (TYO:7201) (OTCMKTS:NSANY) and Ford Motor Co. (NYSE:F). Nissan Motor Co. Ltd. (TYO:7201) (OTCMKTS:NSANY) is repaying $1.4 billion loan raised for upgradation of its Smyrna, Tennessee, manufacturing unit. Ford Motor Co. (NYSE:F) had raised $5.9 billion under the program, which it is still repaying.