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Department of Energy Rejects V-Vehicle Loans

Louisiana politicians “ask” DOE to reconsider. It says it will?

by on Mar.31, 2010

A virtual car company now with virtual funds.

V-Vehicle Company’s (V-VC) two loan applications for $321.1 million from the Advanced Technology Vehicle Manufacturing Loan Program (ATVMLP) from the Department of Energy were rejected last week, but that does not mean taxpayers are off the hook yet. (See A Closer Look at How DOE Spends Your Tax Dollars )

The fledgling venture capital startup, which plans to make four-passenger economy cars 40% cheaper than major automakers, was hoping that taxpayers would subsidize the gamble, and had been in discussion with DOE for about a year.

The first loan application was for $79.9 million to complete engineering integration with V-VC’s 30 U.S. suppliers. The second was for $241.2 million to re-equip and tool a former General Motors parts manufacturing facility as V-VC’s first regional assembly plant in Monroe, Louisiana. About 1.400 jobs would have been created if the company were successful.

The company raised $86.5 million in private capital, and another $87 million in state, local and federal grants had been promised if V-Vehicle obtained the loan.

Aides to U.S. Senator Mary Landrieu and Congressman Rodney Alexander, both of Louisiana, have met with federal Energy Department officials to see how startup automaker V-Vehicle can reapply for $321 million in federal loans, according to the Baton Rouge based NewsStar.   (more…)