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Advanced Technology Vehicles Manufacturing (ATVM) Loan Program is a $25 billion direct loan program funded by Congress in fall 2008 to provide debt capital to the U.S. automotive industry for the purpose of funding projects that help vehicles manufactured in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil. Of the 108 requests made, 5 were approved to receive $8.4 billion, with the majority of that amount under repayment.


Background and criteria

The loan program was authorized under section 136 of the
Energy Independence and Security Act of 2007 The Energy Independence and Security Act of 2007Pub.L. 110-140, originally named the Clean Energy Act of 2007, is an Act of Congress concerning the energy policy of the United States. As part of the United States Democratic Party, Democratic Pa ...
, which provided the program with $25 billion in loan authority, supported by a $7.5 billion appropriation to fund the credit subsidy, or the 30% risk profile expected for projects of this type. To qualify, automakers and eligible component manufacturers must promise to increase the fuel economy of their products by 25% over the average fuel economy of similar 2005 models, and apply the loans to future investments "reasonably related to the reequipping, expanding, or establishing a manufacturing facility in the U.S." In distributing the loans the DOE may decide which technologies it believes are most promising and deserving of assistance. Loan recipients must also be "financially viable" for the length of the loan. Given 60 days by congressional statute to issue an interim final rule, the Department of Energy (DOE), responsible for overseeing the program, finalized the rule 36 days later on November 5, 2008 (compared to 18 months usually needed for such rule making). This program is unrelated to the
United States Treasury Department The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States. It is one of 15 current U.S. government departments. The department oversees the Bureau of Engraving and ...
's
Troubled Asset Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by U.S. Presi ...
(TARP) which has been providing
bailout A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy. A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global syst ...
funding to two of the big three U.S. automakers to reduce the effects of the 2008–10 automotive industry crisis on the United States. The two programs were enacted during the Automotive industry crisis of 2008–10, but with different purposes. It has been speculated that at least two of the Big Three U.S. automobile manufacturers may not be able to qualify for this program because of its fuel economy and financial solvency requirements. In November 2008, the auto industry began lobbying for the $25 billion to be loaned immediately, as well as another $25 billion to be loaned later to cover retirees
health care Health care, or healthcare, is the improvement or maintenance of health via the preventive healthcare, prevention, diagnosis, therapy, treatment, wikt:amelioration, amelioration or cure of disease, illness, injury, and other disability, physic ...
costs. As originally worded, the program was applicable only to four-wheeled passenger vehicles. In October 2009, a bill sponsored by California Representatives
Brian Bilbray Brian Phillip Bilbray (born January 28, 1951) is an American politician who served in the U.S. House of Representatives from 1995 to 2001 and again from 2006 to 2013. He is a member of the Republican Party. Bilbray was Chairman of the House I ...
and
Adam Schiff Adam Bennett Schiff (born June 22, 1960) is an American lawyer, author, and politician serving as the Seniority in the United States Senate, junior United States Senate, United States senator from California, a seat he has held since 2024. A m ...
was passed extending the program's coverage to include high mileage (equivalent to ) two- and three-wheeled vehicles.


DOE's Alternative Vehicle Technologies Awards

The U.S. Department of Energy (DOE) announced in December 2008 the selection of six cost-shared research projects for the development and demonstration of alternative vehicle technology projects totaling a DOE investment of up to $14.55 million over three years, subject to annual appropriations. Private sector contributions will further increase the financial investment for a total of up to $29.3 million. The selections announced are part of DOE’s continuing work to develop high efficiency vehicle technologies and are not part of the recently announced $25 billion Advanced Technology Vehicles Manufacturing Loan Program. These projects were selected under three diverse topic areas:
lithium-ion battery A lithium-ion or Li-ion battery is a type of rechargeable battery that uses the reversible intercalation of Li+ ions into electronically conducting solids to store energy. Li-ion batteries are characterized by higher specific energy, energ ...
materials and manufacturing ( 3M Company for developing advanced anode;
BASF BASF SE (), an initialism of its original name , is a European Multinational corporation, multinational company and the List of largest chemical producers, largest chemical producer in the world. Its headquarters are located in Ludwigshafen, Ge ...
Catalyst for domestic production of low cost
cathode A cathode is the electrode from which a conventional current leaves a polarized electrical device such as a lead-acid battery. This definition can be recalled by using the mnemonic ''CCD'' for ''Cathode Current Departs''. Conventional curren ...
materials and
FMC Corporation FMC Corporation is an American chemical manufacturing company headquartered in Philadelphia, Pennsylvania, which originated as an insecticide producer in 1883 and later diversified into other industries. In 1941 at the beginning of US involvemen ...
for scaling up production of stabilized lithium metal powder for high energy cathodes); thermoelectric
heating, ventilation and air conditioning Heating, ventilation, and air conditioning (HVAC ) is the use of various technologies to control the temperature, humidity, and purity of the air in an enclosed space. Its goal is to provide thermal comfort and acceptable indoor air quality. H ...
(TE HVAC system); and
aerodynamic Aerodynamics () is the study of the motion of atmosphere of Earth, air, particularly when affected by a solid object, such as an airplane wing. It involves topics covered in the field of fluid dynamics and its subfield of gas dynamics, and is an ...
heavy-duty truck trailers ( Navistar International Corporation).


Conditional loans


Overview

USDOE announced in 2009 $8.4 billion in conditional loan agreements for
Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational corporation, multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. T ...
;
Nissan North America Nissan North America, Inc., doing business as Nissan USA, is the North American headquarters, and a wholly owned subsidiary of Nissan Motor Corporation of Japan. The company manufactures and sells Nissan and Infiniti brand cars, sport utility ve ...
, Inc.;
Tesla Motors Tesla, Inc. ( or ) is an American multinational automotive and clean energy company. Headquartered in Austin, Texas, it designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from hom ...
, Inc. and Fisker Automotive to fund the development of advanced vehicle technologies. Additionally, DOE has spent approximately $3.3 billion on federal credit subsidies costs in order to secure the loans for the few approved companies. The loan commitments include a $5.9 billion loan to Ford for upgrading factories in five states to produce 13 more fuel-efficient models, a $1.6 billion loan to Nissan to build advanced electric vehicles and advanced batteries, and a $465 million loan to Tesla Motors to manufacture its new electric sedan. These are the first conditional loans released under DOE's Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which is using an open, competitive process to provide about $25 billion in loans to companies that produce cars or vehicle components in the United States. To qualify, companies must propose projects that increase fuel economy to at least 25% above 2005 fuel economy levels. By 2014, Ford and Nissan were making payments, while Tesla paid back the loan in 2013. Nissan eventually repaid the loan in 2017. The program has earned the government nearly $3 billion in interest. The program had not issued new loans since 2011, and six applicants were seeking around $12 billion of loans in early 2020. The federal government has considered shutting down the program under the Trump Administration. , the Department was analyzing 126 proposals for loans totaling $126 billion.


Ford

Ford Motor Company received its loan in September 2009, the funds were used to upgrade its engine plants in Dearborn, Michigan; Cleveland, Ohio; and
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, and to upgrade its transmission plants in Livonia, Michigan; Sterling Heights, Michigan; and Sharonville, Ohio. Ford also upgraded its assembly plants in Chicago, Illinois; Louisville, Kentucky; Dearborn, Michigan; Wayne, Michigan; and Kansas City, Missouri, converting two of the truck factories into assembly plants for cars. In addition, the loan financed advances in traditional combustion engines and electrified vehicles and helped raise the fuel efficiency of more than two dozen popular models. The V6 EcoBoost engine benefited from the loan, and is installed in many cars as well as over 500,000
F-150 The Ford F-Series is a series of light-duty trucks marketed and manufactured by Ford Motor Company since model year 1948 as a range of full-sized pickup trucks — positioned between Ford's Ford Ranger (T6), Ranger and Ford Super Duty, ...
, saving 268 million gallons of gasoline by 2014. The loan was fully repaid($5.9 billion including interest) in June 2022. In 2023, the Program approved a $9.2 billion loan for Blue Oval City, a battery plant by Ford and SK Innovation.


Nissan

Nissan aims to manufacture a cost-competitive electric vehicle with a
lithium-ion battery A lithium-ion or Li-ion battery is a type of rechargeable battery that uses the reversible intercalation of Li+ ions into electronically conducting solids to store energy. Li-ion batteries are characterized by higher specific energy, energ ...
pack in
Smyrna, Tennessee Smyrna is a town in Rutherford County, Tennessee, United States. Smyrna's population was 53,070 at the 2020 census, making it the largest town in Tennessee by population in that census. Smyrna is part of the Nashville metropolitan area. Histo ...
, and plans to eventually reach a production capacity of 150,000 vehicles per year. The
Nissan Leaf The is a battery-electric car manufactured by Nissan, produced since 2010. It was offered exclusively as a 5-door hatchback until 2025, which since then has become a crossover SUV model. The term "LEAF" serves as a backronym to ''leading envir ...
is produced at Nissan's Smyrna assembly plant since 2013, along with cells for its batteries. Nissan repaid the loan in 2017.


Tesla

Tesla Motors will use its funding () to finance a California-based manufacturing facility for the
Tesla Model S The Tesla Model S is a battery-electric, four-door full-size car produced by the American automaker Tesla since 2012. The automaker's second vehicle and longest-produced model, the Model S has both received mixed reviews from critics and a ...
sedan, an all-electric sedan that can be recharged at a conventional 120-volt or 240-volt outlet. Production will begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013. Tesla repaid the loan in May 2013, and was the first car company to have fully repaid the government, while Ford, Nissan and Fisker had not up to that moment.


Fisker Automotive

The fourth conditional commitment that the Department of Energy has entered into under the ATVM Loan program is a $528.7 million loan for Fisker Automotive for the development of two lines of
plug-in hybrid A plug-in hybrid electric vehicle (PHEV) or simply plug-in hybrid is a type of hybrid electric vehicle equipped with a rechargeable battery pack that can be directly replenished via a charging cable plugged into an external electric power so ...
s by 2016. Fisker received $192 million, before losing access to the rest of the loan. Fisker later defaulted once the company began to suffer from financial issues. In 2013, the company declared voluntary bankruptcy. The DOE would ultimately reclaim $28 million from Fisker for a total of $53 million recovered of its $192 million loan. The money came from a three-day auction in which Chinese auto parts supplier Wanxiang Group received court approval on February 18, 2014, to buy the assets of Fisker with a bid of $149.2 million against a rival bid from Hong Kong billionaire
Richard Li Richard Li Tzar-kai is a Hong Kong businessman and philanthropist. The founder and chairman of the private investment group Pacific Century Group (PCG), Li started his career in the 1990s with the founding of STAR TV, a pan-Asian televisi ...
.


Syrah Technologies

In 2022, the program granted $107 million to Syrah Technologies to assist its graphite-based active anode material Vidalia Facility in Louisiana. The grant was the first in over 10 years.


Ultium Cells LLC

The joint venture of
General Motors General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. The company is most known for owning and manufacturing f ...
and
LG Energy Solution LG Energy Solution Ltd. (LGES; ) is a battery company headquartered in Seoul, South Korea. LGES is one of the largest battery makers in the world alongside CATL, Panasonic, SK Innovation, and Samsung SDI. History LG Chem Energy Solution Busi ...
, Ultium Cells LLC, won a $2.5 billion loan in December 2022. The company intends to use the loan towards setting up three US factories in the states of Ohio, Tennessee, and Michigan, to make its lithium-ion battery systems.


Redwood Materials

Redwood Materials secured a $2 billion conditional loan in February 2023. The company which relies primarily on Asia for importing essential components to make EV batteries said it would use the funds to build a supply base in the US and expand operations by building a facility in
Charleston, South Carolina Charleston is the List of municipalities in South Carolina, most populous city in the U.S. state of South Carolina. The city lies just south of the geographical midpoint of South Carolina's coastline on Charleston Harbor, an inlet of the Atla ...
.


Unsuccessful applications

About 108 requests were made to the program by 2010, but few were approved. Many of the companies which were denied loans have since gone out of business. Among the applicants denied were: * A loan request under this program was denied for Carbon Motors Corporation in March 2012 after the latter had spent 2 years prior addressing the DOE's concerns. * Aptera Motors' initial application was denied because its product was a three-wheeled vehicle; the wording on the program was modified to allow high-mileage three-wheelers and Aptera reapplied, however the company went out of business before the DOE responded to their second application. * Brammo asked for $45 million, application was rejected. *
Local Motors Local Motors was an American manufacturing company focused on low-volume production of open-source vehicles and other products using multiple microfactories. The company built a platform that combined online community co-creation with distribut ...
' Local Motors initial application (filed in 2009) was rejected, company said to be working on resubmission. *
Bright Automotive Bright Automotive was a startup company in Anderson, Indiana, working to create a fuel economy in automobiles, fuel-efficient line of plug-in electric vehicles.Fehrenbacher, Katie. "The First Investment from GM's VC Arm: Bright Automotive: Clean ...
, who filed their application in 2008, went out of business in March 2012 after waiting 4 years for the DOE to respond and being unable to sustain continued operations. * Coda Automotive, ultimately went into
Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...
on May 1, 2013. * XP Vehicles - sued the U.S. Department of Energy


References


External links


Advanced Technology Vehicles Manufacturing Loan Program
Official website * * * {{cite web , url=https://www.scribd.com/doc/145484203/HQ-2013-00911-F-George-List-of-Loans , title=Conditional commitment letter by and between United States Department of Energy and Tesla Motors, Inc , date=June 23, 2013 United States federal energy legislation Energy policy of the United States