US resurrects green energy loan program that helped put Tesla on the map

Photo by MANDEL NGAN/AFP via Getty Images

The Department of Energy's Advanced Technology Vehicles Manufacturing program is set to give out its first loan in over a decade. A $2.5 billion loan will be announced by the department to help fund the construction of a new battery manufacturing facility. The news was reported by the news agency.

The ATVM program has achieved almost mythical status in the EV startup world due to its timely $465 million loan toTesla which is credited with saving the company from an early death. Since then, a number of cash- strapped EV startups have requested loans but to no avail.

Congress created the ATVM program in order to provide low-cost debt capital for fuel efficient vehicle and eligible component manufacturing in the U.S.

Ford and Nissan received larger grants thanTesla. Nissan was given over one billion dollars to support the production of its Leaf electric car, while Ford received over six billion dollars to improve its vehicles. Both Nissan andTesla have repaid their loans.

Some recipients are doing better than others. Fisker was once a manufacturer of luxury electric cars. The Department of Energy gave it $529 million in 2010, but funding was frozen in 2011. After filing for bankruptcy, the company was bought by a Chinese auto parts supplier.

The ATVM program went dark at the same time that Republicans were ramping up their criticism of former President Barack Obama and his administration for its handling of another Department of Energy loan to Solyndra. Romney compared the company to Solyndra when he was running for president. Musk says he will vote for Republicans in the next election.

Democrats no longer worry about handing out government backed loans to clean energy companies. Much of the $5 billion secured by President Joe Biden for electric vehicle charging will be paid out in loans to EV charging companies. The resurrected ATVM program is a pot of money that can be used to fund some of the administration's priorities.

GM is the person who is receiving it. Biden praised the automaker's plans to expand its manufacturing footprint and test-drive the Hummer EV. Biden said one hell of a vehicle. The purpose of the joint venture was to build new facilities in Ohio, Tennessee, and Michigan.

More than 5,000 high-tech jobs will be created in the United States by these facilities. We are excited to work with the Department of Energy on the next steps.

Jigar Shah, director of the DOE Loan Programs Office, said in a statement that the department is trying to build a domestic supply chain to meet the growing demand for electric vehicles. Thousands of good-paying jobs will be created in three states by these new manufacturing facilities.