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On Capitol Hill: New Bill Aims To Boost DOE Fund For Fuel-Efficient Vehicle Development

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http://www.flickr.com/photos/pong/ Creative Commons license

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Remember those loans we mentioned on Tuesday--the ones that the Department of Energy made to Ford, Nissan, and Tesla for the development of fuel-efficient vehicles? At the time, we said that certain members of congress were interested in doubling the amount of funds available to automakers, from $25 billion to $50 billion. Well, this weekend, lawmakers may get the chance to do just that.

House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Representative Ed Markey (D-MA) have sponsored a bill that would, among other things, allot additional money to the development of plug-EVs and other advanced-tech vehicles. TCC hasn't had the opportunity to read through the 1200-page legislation (it's Friday, after all), but we know that its centerpiece is a cap-and-trade system for power plants, refineries, and large factories, which is designed to curb greenhouse gas emissions. The bill also contains a clause that requires utility companies to consider adding electric charging stations the grids they oversee, which begs two questions: (a) what does "consider" mean, and (b) what about all those entrepreneurs hoping to line America's streets with charging points?

But we'll put those questions aside for now. As far as automakers are concerned, the big news is that if passed, the bill would double the loan money available for the development of electric and other fuel-efficient vehicles. On Tuesday, the DOE handed out the first $8 billion in loans from the $25 billion fund, and Secretary of Energy Stephen Chu has said that the remaining $17 billion will be awarded over the next few months. If passed, Waxman and Markey's legislation would obviously extend that timeline--which would be great news to Chrysler and General Motors, since they missed out on the first funding round due to their restructuring, and there's no guarantee that they'll be stable enough to make the cut for the second round.

It's a complex bill, and we're sure that it's not going to sail unfettered through the House and Senate. But we'll keep an eye on it between innings (and sets), just to be safe.

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Comment (1)
  1. Regarding the politics of the DOE ATVM Loan awards:
    So it turns out to be all the best loans money can buy.
    Ford paid over $14M to elected officials and consultants in order to get the loan. Ford paid the third largest amount and Ford got the third largest loan. This is disclosed in public records searches and lobby filings just revealed. 21 elected officials had direct benefit from the deal.
    Nissan paid over $10M to elected officials and consultants in order to get the loan. Nissan paid the third largest amount and Nissan got the third largest loan. This is disclosed in public records searches and lobby filings just revealed. The law and public statements by elected officials state that the money was to increase American competitiveness for America car companies yet the money was given to a Japanese company who will send all of the profits back to Japan. 7 elected officials had direct benefit from the deal.
    Tesla paid over $100,000.00 to elected officials and consultants in order to get the loan. Tesla paid the third largest amount and Tesla got the third largest loan. This is disclosed in public records searches and lobby filings just revealed. Tesla’s filings show that their business model is unsustainable compared to competitors, that they were 200% off on the BOM of their car, that all of their first funding was wasted so they have to pay back twice as much to investors as competing companies and that their technology is so old, it all needs to be redone yet they still got money. 18 elected officials had direct benefit from the deal. Tesla did not even read the rules for the loan and planned to build a building when the NEPA rules make that option impossible so they had to restart the process, which is supposed to put one into a new cycle yet they were kept in the previous cycle and put ahead of Fisker, Bright and others who had applied earlier than Tesla. Tesla provided massively creative accounting records to show that they were financially sustainable and have issued numerous press releases to try to make people think that but, in fact, the truth is that they are not because of bad management issues that they cannot get past.
    The ATVM program was created by Ford, GM & Chrysler lobbyists to pad their company’s pockets and those three had pre-hardwired the entire $25B for their own pockets but something happened in the process when Senator Bingaman added a few key lines that opened the door for OTHERS to apply to build green technology and required that those who get the money were “financially sustainable” businesses. Back when the ATVM was authored to save Detroit, it was fully known that Detroit was going to go bankrupt. Ford had the same problems as GM and Chrysler but they went around the world getting bailout money instead of going first to US funds. As law required public exposure of the bankruptcy, Bingaman’s brilliant plan to finally create a green transportation industry was revealed. The very people that had stopped green cars for over 100 years suddenly became the first people to, accidently, cause them to happen but now others could do it too.
    Bingaman should get the Congressional Medal of Honor for pulling off this impossible trick and finally giving America the Electric Cars it should have had for the last hundred years.
    Once Detroit realized this, they tried to hijack the whole ATVM program with a takeback at the end of 2008 but that effort was defeated by a close late night vote. Now that it was out there, Detroit lobbyists and influencers fought to get the review of applicants delayed for as long as possible because they realized that, in a recession, most of the smaller competing interests could be forced to go out of business if they could just be kept away from the money for long enough. Major American TARP banks have said that the standard commercial loan process that each of these 26 applicants (not hundreds of applicants- There were 26 applicants in the round) should take 4 weeks at the longest and 3 weeks nominally. It seems clear that the loans were delayed due to political agendas and not process issues. It is not that there were no resources for the review as the Section 136 law provided over $10M in staff fees to review 26 people (Banks spend $10,000.00 to review 26 applications)
    Bright Automotive had applied on time, ahead of the others, turned in low overhead numbers and a great path too profit but they were virtually ignored while intensive meetings were conducted with Nissan, Ford and Tesla because those parties paid for it. The law says that this, and the purchasing of favors, gave those parties an unfair business advantage using taxpayer dollars, over Bright. A case Bright would easily win if they choose to run with it.
    Clearly, it isn’t over yet. Stay tuned for the Senate, Congressional, Ethics Committee and media reviews of this one. Watch for the charts connecting who-to-who. (It is OK to re-post this)
     
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