Zoomi Life

Tesla Motors has already run into the problem with that the Department of Energy’s Advanced Technology Vehicle Manufacturing Incentive Program’s loans don’t apply to them. Not because of their technology, but because they can’t put up matching loan funds to secure the loan.

The ATVM program requires that those applying for the loans put up matching equity funds and demonstrate their financial viability.  Tesla was unable to do that and General Motors and Chrysler are in the same boat. GM can’t even convince the Obama Administration that it’s viable, let alone the DoE.  Chrysler is likely to find itself in that same predicament, since they were given 30 days to clean up their financial quarter or face bankruptcy.

The first round of loans from the multi-billion dollar fund are expected to be issued next month. While the automakers might pull a last-minute deal to secure some of those loan funds, it will depend on the Treasury and the Energy departments coming to an agreement.

GM is specifically asking for $2.6 billion to develop additional Voltec-based vehicles while Chrysler is trying for $6 billion for various projects.  Ford has already shown qualification and will likely receive at least part of the $11 billion they’ve asked for.

I think you all can guess my reaction to all this: if it were my decision to loan out my money, I’d refuse them. Why loan money to someone who’s not likely to be able to pay it back?  I’d rather see these loans go towards smaller, more viable, and definitely getting-somewhere companies like Fisker (who seem to have no trouble getting private-sector loans) and Aptera.  Better yet, why not put that money back into the Treasury to cover some of that bailout cash these automakers have already received and that we’ll never see again?

Sources: 1, 2