Where's the $25 Billion for Efficient Cars?
As President Barack Obama tries to ease the domestic auto crisis, a government-backed plan to help develop a greener U.S. auto industry has failed to launch, the New York Times reports.
A $25 billion loan program run by the Department of Energy was established in 2007 to accelerate a green car revolution. Specifically, the loans were supposed to give automakers the retooling money they would need to build vehicles that get 25% better mileage.
Yet, today, none of the money has been doled out. According to the Times, the reasons include a poorly staffed team of 12 people sifting through 75 applications (some of which are more than 1,000 pages long) and a vague validation process.
Companies asking for money include General Motors and Chrysler, who have asked for $13 billion in retooling money for projects like the Chevy Volt and Cruze and the Dodge Circuit. Ford wants $5 billion for its plug-in hybrid program and an electric car and van. Even Nissan is trying to get in on the action, though DOE rules are skewed toward helping the Big Three.
Startups also want a share, the most famous being Tesla Motors, which wants $350 million to build a new factory in northern California for a new sedan. A123 Systems — one of America’s few battery producers — wants $1.8 billion to build a next-generation battery plant in Detroit.
As credit remains scarce and climate concerns increase, there is added impetus to get these projects under way.
Energy Secretary Steven Chu said he hopes to jump-start the loan process, making the first payments available by April or May. So far, the 75 applications have been trimmed down to 25 well-qualified firms, but there’s no word on which companies those might be. The $787 billion stimulus package gives Chu another $2 billion to play with.