In 2007, the federal government created the Advanced Technology Vehicle Manufacturing initiative to help automakers and suppliers develop alternative technologies.
According to DetNews, on Tuesday, March 13, during an Energy and Natural Resources Committee hearing, many senators accused the Department of Energy (DOE) of mishandling the US$25 billion program.
They said that the DOE had not offered a new retooling program in a year and no new major loans in the past two years. Republican Senator Lisa Murkowski said that the department had made the program “virtually dormant”, while others, like Senator Rand Paul, went as far as saying that “we need to get out of this business” as the program makes no sense at all.
Carmakers Ford, Nissan, Tesla and Fisker were among the recipients of DOE loans. After three companies involved in the program went bankrupt, though, the Energy Department froze all payments to review all cases.
One such case was California-based solar-panel manufacturer Solyndra, which left 1,100 people unemployed and its bankruptcy may have cost the government US$528 million.
On the other hand, freezing all payments had a negative effect not so much on big corporations like Nissan or Ford, but much smaller ones such as Fisker Automotive.
After the federal loan was frozen last May, Henrik Fisker’s newly founded company was forced to halt work on its Delaware plant and put its new Nina hybrid on hold. And, if a former employee’s claims are true, it may have even launched the Karma prematurely in order to meet DOE deadlines.
Energy Secretary Steven Chu defended the Department’s handling of the program, as it wanted to make sure that taxpayers’ money didn’t go to waste.
“We are very focused on driving the cost of electric vehicles down”, said Chu. He added, though, that federal loans shouldn’t be the only financing and the DOE “would like to see private equity invested in these companies”.
Despite Chu claiming that the Energy Department was working “with many qualified applicants” to supply new loans, Democrat Senator Debbie Stanebow noted that “the fallout from Solyndra has dampened the Department’s willingness to make new loans”.
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