US resurrects green energy loan program that helped put Tesla on the map
The Department of Energy’s Advanced Technology Vehicles Manufacturing program, which famously helped put Tesla on the map, is set to hand out its first loan in over a decade. The department will announce a $2.5 billion loan to a joint venture of General Motors and LG Energy Solution to help fund the construction of a new lithium-ion battery manufacturing facility, the company confirmed. (The news was first reported by Reuters.)
The Advanced Technology Vehicles Manufacturing program, or ATVM has attained almost mythical status in the EV startup world thanks to its timely $465 million loan to Tesla, which is credited with helping save the company from an early death. Since then, a number of cash-strapped EV startups have also requested loans but to no avail; the program has basically been dormant since 2010.
The ATVM program was created by Congress under the administration of former President George W. Bush, allocating $25 billion “to provide low-cost debt capital for fuel-efficient vehicle and eligible component manufacturing in the United States.”
Other recipients include Ford and Nissan, both of which received much larger grants than Tesla. Ford got $5.9 billion to renovate factories across the country and improve its vehicles’ energy efficiency, and Nissan was given $1.45 billion to support production of its Leaf electric car. (Tesla and Nissan have both paid back their loans.)
Not all recipients are doing as well. Like Tesla, Fisker Automotive was once a promising producer of luxury electric cars. In 2010, the Department of Energy granted it $529 million, but funding was frozen in 2011 after it failed to meet milestones. Since then, the company has filed for bankruptcy, was later purchased by a Chinese auto parts supplier, and relaunched as Karma.
Notably, the ATVM program went dark around the same time that Republicans were ramping up their criticism of former President Barack Obama and his administration for its handling of another Department of Energy loan to Solyndra, a clean energy company that later went bankrupt. Ironically, Tesla was once derided as a “loser” by then-presidential candidate Mitt Romney, who compared the company to Solyndra. Tesla CEO Elon Musk now says he plans on voting for Republican candidates in the next election.
But in ensuing years, Democrats have lost their trepidation over handing out government-backed loans to clean energy companies. President Joe Biden secured $5 billion for electric vehicle charging as part of his bipartisan infrastructure plan, much of which will be paid out in loans to EV charging companies (including Tesla). And while much of Biden’s climate agenda remains stalled in Congress, the resurrection of the ATVM program is a pot of money that’s still available to the administration to fund some of its priorities.
Unsurprisingly, GM is the recipient. Biden has lavished attention on the automaker, praising its plans to expand its manufacturing footprint and even test-driving the GMC Hummer EV. (“One hell of a vehicle,” Biden concluded.) GM formed the joint venture Ultium Cells with South Korea’s LG Energy Solution with the purpose of building new facilities in Ohio, Tennessee, and Michigan.
“These facilities will create more than 5,000 new high-tech jobs in the United States,” a spokesperson for Ultium Cells said in a statement. “We are grateful for the consideration and look forward to working with the Department of Energy on next steps.”
“[Loan Program Office’s] conditional commitment to Ultium Cells is the latest proof point of the Department’s ongoing efforts to help build a domestic supply chain to meet the growing demand for electric vehicles,” Jigar Shah, director of the DOE Loan Programs Office, said in a statement. “These new manufacturing facilities will create thousands of good-paying jobs across three states while enabling improvements in existing lithium-ion battery technologies.”
The Department of Energy’s Advanced Technology Vehicles Manufacturing program, which famously helped put Tesla on the map, is set to hand out its first loan in over a decade. The department will announce a $2.5 billion loan to a joint venture of General Motors and LG Energy Solution to help…
