GAO report finds DOE not actively considering any applications for Advanced Technology Vehicles Manufacturing (ATVM) loan program
A new review of the status of US Department of Energy (DOE) loan programs by the US Government Accountability Office (GAO) found that, as of 29 January 2013, DOE was not actively considering any applications for using the remaining $16.6 billion in loan authority or $4.2 billion in credit subsidy appropriations available under the Advanced Technology Vehicles Manufacturing (ATVM) loan program.
The ATVM loan program was established in 2007 by the Energy Independence and Security Act (EISA) to provide up to $25 billion in loans for projects to produce more fuel-efficient passenger vehicles and their components. The fiscal year 2009 continuing resolution provided the ATVM loan program with $7.5 billion in appropriations to cover credit subsidy costs. DOE has made five loans worth $8.4 billion and used $3.3 billion in appropriations to cover credit subsidy costs. Loans awarded were:
Ford Motor Company, $5.907 billion, Sep 2009: to upgrade factories across Illinois, Kentucky, Michigan, Missouri, and Ohio and to introduce new technologies to raise the fuel efficiency of more than a dozen popular vehicles.
Nissan North America, $1.448 billion, January 2010: to retool its Smyrna, Tennessee assembly plant to manufacture all-electric automobiles in addition to existing Nissan vehicles, and to construct an advanced battery manufacturing facility
Tesla Motors, $465 million, January 2010: to (1) reopen an auto manufacturing plant in Fremont, California to produce EVs, and (2) to develop a manufacturing facility to produce battery packs, electric motors and other powertrain components that will power all-electric plug-in vehicles manufactured by Tesla and other original equipment manufacturers including Daimler and Toyota.
Fisker Automotive, $529 million, April 2010: for the development and production of two lines of plug-in hybrid electric vehicles.
The Vehicle Production Group, $50 million, March 2011: to support the development of the six-passenger MV-1, a factory-built wheelchair accessible vehicle that will run on compressed natural gas
According to the GAO report, as of January 29, 2013, DOE had no applications under active consideration for ATVM program loans and has received 7 applications requesting a total of $1.48 billion that it considers to be inactive.
Two applications requesting a total of $0.31 billion are “substantially complete”—i.e., ready for consideration. However, according to DOE officials, while an application may be substantially complete, a project may not be ready to proceed for a variety of reasons including insufficient project sponsor equity or the project technology’s readiness.
Five applications requesting a total of $1.17 billion are “not substantially complete,” meaning the applicant must provide additional information to DOE before the agency can make an eligibility determination.
The ATVM loan program is accepting applications on an ongoing basis, per procedures set forth in the ATVM Interim Final Rule. According to DOE officials, they are not likely to use all of the remaining ATVM loan program authority given the current eligibility requirements. The loan authority and credit subsidy appropriations for ATVM do not expire.
While most ATVM loan program applicants and other auto manufacturers with whom the GAO reviewers spoke noted that there remains a need to promote advanced technology for increasing fuel economy, in many cases they said that the costs of participating in the ATVM program outweigh the benefits to their companies.
According to the GAO, most applicants and manufacturers cited lengthy and burdensome application and review processes or restrictive loan and reporting requirements as challenges.
Most applicants and manufacturers also noted that public problems with the Solyndra default and other DOE programs have tarnished the ATVM loan program. They believed the negative publicity makes DOE more risk-averse or makes companies wary of being associated with government support.