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Congress threatening to end ATVM loan program that funded Leaf, Model S, and other successes

A Bush-era program giving federal loans to support "advanced technology vehicle manufacturing" is under threat from Congress, but it should be ended anyway.

The Dept. of Energy Advanced Technology Vehicle Manufacturing loan program has some great successes behind it, such as the Nissan Leaf, the Chevy Volt and the Tesla Model S. But there are a few failures, and the way of Congress nowadays is to amplify any negative that can be used to bash the Obama Administration. According to the Detroit News, the House Appropriations Committee is intending to cut the remaining funds out of the ATVM loan program coffers, effectively ending further government loans for advanced technology vehicle development.

The program dates from the Bush 43 administration, following his State of the Union speech where he declared the US is Addicted to Oil. Among the programs enacted to attempt to wean the U.S. off Oil was the ATVM program. When the Obama administration came to power that program became a convenient tool for the green technology revolution vision, but as part of the auto industry support badly needed thanks to the economic crisis perpetrated by the Bush administration.

The Dept of Energy awarded $9 billion in loans out of the $25 billion budget Congress gave the program. Loans went to Ford for retooling related to getting up to speed on hybrid and electric vehicles, to Nissan for building the Nissan Leaf plant, to Tesla Motors for the Model S, to Fisker Automotive for the Atlantic and Karma, and to the Vehicle Production Group for a natural gas powered taxi. Of these only the last two had troubles, with VPG going belly up, and Fisker barely avoiding going belly up.

In other words the program has a good track record despite a couple losses. The Fisker loss was stemmed by early action by the Dept of Energy to cut off Fisker's loans before the company went too far astray.

The Nissan Leaf plant moved some of Nissan's manufacturing to the U.S. adding jobs in Tennessee. The Tesla Motors factory created a whole new manufacturing company, while resurrecting a large factory in Fremont CA that would have otherwise become a white elephant.

The question is whether Congress should cut this program, or not. The program has gotten caught up in Republican pseudo-ideology, creating a climate of distrust of the legitimacy of government loans to businesses despite the fact that the U.S. government has for decades been making grants or loans to businesses. Another piece of pseudo-ideology is the backlash against electric car tax subsidies, saying the government shouldn't be doing this kind of thing, when this sort of tax subsidy has been given for decades. Was there such a hue and cry with the Hummer tax loophole that gave a tax subsidy for that SUV?

Despite the Republican-led tarnishing of the program leading the Dept of Energy to stop handing out ATVM loans over 2 years ago, the program is a success. Even though there are billions of dollars left in the ATVM coffers that could be handed out, perhaps the program should be shut down while recognizing its successes. However, if the Republican-led House of Representatives shuts it down on its own terms, they may be able to further tarnish the program as a disastrous failure.

The attempt to defund the ATVM program is being tied to emergency funding for wildfire firefighting teams. That money needs to come from somewhere, and House Republicans somehow chose to tap the ATVM program coffers.

Source: Detroit News