$16 billion in DOE loans still available for auto suppliers

The DOE is encouraging auto suppliers to step forward for a share of $16 billion in low-interest financing that’s still available under the Advanced Technology Vehicles Manufacturing (ATVM) loan program.

Congress created the ATVM program in 2007, and it famously lent about $8.4 billion to Ford, Nissan, Tesla and Fisker. Although the program hasn’t approved a loan since March 2011, it is not dormant, and suppliers have always been eligible. As the DOE’s Peter Davidson told Automotive News, “We are open for business.”

The program is being overhauled to make it easier to fund production of technologies such as lightweight materials, efficient engines and low-friction tires. Changes include legal clarifications to show that suppliers are eligible for the program, a promise to respond more quickly to applicants and the creation of a new online application portal.

“The US auto industry has evolved since the ATVM program was established,” said Energy Secretary Ernest Moniz. “Today we are presented with an opportunity to hit the accelerator on US auto manufacturing growth.”

To qualify for a loan, a company needs to contribute to vehicles that are 25 percent more efficient than equivalent vehicles made in 2005.

Roland Hwang of the Natural Resources Defense Council said environmental advocates used to worry that suppliers would receive funding for parts that were used to make cars more powerful, rather than more efficient, but now that stricter fuel economy standards are in place, that’s less of a concern.

“We’re increasingly seeing suppliers shoulder a heavier burden in meeting these new fuel economy standards,” Hwang said. “They’re facing increasing demand for these components and bottleneck situations in terms of their capacity. Focusing on suppliers seems like a very appropriate use for this program.”

 

Source: Automotive News