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A Closer Look at How DOE Spends Your Tax Dollars

As always, the devil is in the details of the political payouts.

by on Jun.23, 2009

And the winner of your tax dollars is...

And the winner of your tax dollars is ...

The first three auto loans for developing “advanced technology” that were announced earlier today actually had their origins under the Bush Administration when the economy, auto companies and taxpayers were in much better shape, at least on the paper that mortgage-backed securities were written on.

Section 136 of the Energy Independence and Security Act of 2007, advanced by the Bush Administration, established an incentive program consisting of both grants and direct loans to support the development of advanced technology vehicles and associated components in the United States. The Department of Energy (DOE) is charged with administering the section 136 program, now known as the Advanced Technology Vehicles Manufacturing Loan Program (ATVM).

Under section 136, the ATVM provides loans to automobile and automobile part manufacturers for the cost of re-equipping, expanding, or establishing manufacturing facilities in the United States to produce “advanced technology vehicles” or qualified components, and for associated engineering integration costs.

Click Here To Subscribe To TDBFirst appropriated in the fall of 2008, the program will provide about $25 billion in loans to companies making cars and components in U.S. factories that increase fuel economy at least 25% above 2005 fuel economy levels. The technical and financial review process is focused not on choosing a single technology over others, but is aimed at promoting multiple approaches for achieving a fuel efficient economy, in other words – a scattershot approach that allows the doling out of tax dollars over multiple Congressional areas.


First Three Auto Loans for Advanced Technologies to Ford, Nissan, and Tesla. Chrysler, GM shutout

Ford Motor Company Accepts U.S. Taxpayer Subsidized Loans from the Department of Energy.

by on Jun.23, 2009

"By supporting key technologies and sound business plans, we can jumpstart the production of fuel efficient vehicles in America,"

"By supporting key technologies and sound business plans, we can jump start the production of fuel efficient vehicles in America."

One year after the program was announced by the Bush administration in 2007, the first three auto loans for developing advanced technology were granted to the Ford Motor Company, Nissan Motors and Tesla Motors.

The $8 billion in conditional loan commitments for the development of advanced vehicle technologies include $5.9 billion for Ford Motor Company to “transform factories” across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce 13 more fuel efficient models; $1.6 billion to Nissan North America, Inc. to retool its Smyrna, Tennessee factory to build advanced electric automobiles and to build an advanced battery manufacturing facility; and $465 million to Tesla Motors to manufacture electric drivetrains and electric vehicles in California.

These are the first loan commitments disbursed as part of the Department of Energy’s Advanced Technology Vehicles Manufacturing program, dubbed section 136, which has $25 billion in U.S. taxpayer funding. The Department plans to make additional loans over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.

Chrysler and General Motors are, for the moment, excluded because of their financial fragility, and, we surmise, their extremely unpopular taxpayer loans or potential giveaways that they have already received.

“We have an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America,” said President Obama.  “These loans – and the additional support we will provide through the Section 136 program — will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market.”