U.S. DoE Looks to Broaden ATVM Loan Program, Launches $50 Million Research Fund

It’s been one of the most controversial of government bailout programs of recent years with both some massive success stories and cringeworthy failures, but the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program (ATVM) might be about to get a wider scope to include the automotive supply chain.

That’s according to Energy Secretary Ernest Moniz, who was speaking at the Washington Auto Show yesterday to announce a new $50 million DoE program to help automakers meet looming Corporate Average Fuel Economy (CAFE) and emissions standards.

Tesla's low-interest loan under the ATVM program allowed it to ready itself to bring the Model S to Market

Tesla’s low-interest loan under the ATVM program allowed it to ready itself to bring the Model S to Market

Talking with Automotive News, Moniz said the program — which hasn’t made any new awards since 2011 — would be widened to include suppliers to the automotive industry when it finally gets revived.

This would operate alongside the new dedicated $50 million research and development fund, which will include support for the DoE’s Electric Vehicles Everywhere Grand Challenge, a drive towards making plug-in vehicle cheaper and more convenient to own than gasoline ones within ten years.

“We are looking at what those options might be including the potential of looking at the supply chain with a loan program,” he said. “Looking at the supply chain may be an important focus for a new program.”

Expanding the program to include suppliers would be a smart move, as it would enable those who currently produce components used in the automotive industry — everything from starter motors and air conditioning units to electric vehicle battery packs and ignition systems — to do their own bit to improve the fuel efficiency of cars rolling off the production line.

Originally instigated under President George W. Bush’s Congress in 2008, the ATVM Loan Program was designed specifically to offer automakers a low-interest conditional line of credit to help them develop cleaner, greener, advanced technology vehicles. The program allowed for the funds to be used for a wide variety of technologies, from more efficient gasoline and diesel engines through to hybrid drivetrains, electric vehicles and even hydrogen.

Recipients under the loan program have included Ford, Nissan, and Tesla, all of who have used DoE funds to design and build more efficient vehicles. Ford, for example, received $5.9 billion to help it upgrade factories in five states to help it develop and produce a whole new range of fuel-efficient engines. Nissan was loaned $1.6 billion in order to build electric cars like its LEAF hatchback and to develop advanced battery technologies. Tesla, meanwhile, was awarded $465 million to help it ready its all-electric Model S luxury sedan for market.

Instead of paying out the total loan amounts to each successful applicant, the DoE drip-fed funds to applicants on a strictly-moderated conditional basis.  If recipients met the required targets in a timely manner, the DoE would release more funds for continuation of the project being undertaken. If conditions or repayments were not met — as was the case with DoE ATVM recipient Fisker Automotive — the DoE refused to pay further funds out. This not only served to help the DoE keep track on the progress applicants were making, but also served to ensure the DoE was not continuing to pay out to companies who had become financially unstable.

ATVM loan funds also helped Nissan retrofit its Smyrna, Ten. facility to make the Nissan LEAF.

ATVM loan funds also helped Nissan retrofit its Smyrna, Ten. facility to make the Nissan LEAF.

While the success stories of the AVTM program — including Tesla, who paid off its loans nine years ahead of schedule — have helped move the automotive industry towards a more fuel efficient, less fossil-fuelled reliant future, critics of the AVTM loan program are of course quick to cite its failures. These include Fisker automotive, Carbon Motors, Aptera, and Bright Automotive, all of whom were given a conditional line of credit by the DoE but found themselves unable to meet the strict criteria demanded by the loan conditions and subsequently found themselves shuttered or slowed by the program.

It’s worth noting at the present time that while the DoE said in August last year that it was looking to reboot the ATVM program in order to allocate the remaining $15 billion of unallocated funds, nothing has been officially set in stone at the time of writing.

But who do you think should receive the remaining DoE ATVM loan funds? Would you like to see it go towards better battery pack research, perhaps in the field of nanowire cathode technology? Or perhaps you’d like to see the ATVM program expand to include cheaper, more reliable charging infrastructure for electric cars?

Leave your thoughts in the Comments below.


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