Energy: Advanced Technology Vehicles Manufacturing Loan Program (2014-13)
Year Identified: 2014
Area Number: 13
Area Type: Cost Savings & Revenue Enhancement
◐- Partially Addressed
○- Not Addressed
◉- Consolidated or Other
⊘- Closed-Partially Addressed
⊗- Closed-Not Addressed
Last Updated:March 31, 2020
Unless the Department of Energy (DOE) can demonstrate a demand for new Advanced Technology Vehicles Manufacturing (ATVM) loans and viable applications, Congress may wish to consider rescinding all or part of the remaining $4.3 billion in credit subsidy appropriations.
As of March 2020, Congress had not passed legislation rescinding all or part of the remaining $4.3 billion in credit subsidy appropriations, as GAO suggested in April 2014. Several bills have been proposed to adjust eligibility or financial viability requirements. As of March 2020, DOE had not demonstrated demand for ATVM loans sufficient to use the program's remaining credit subsidy appropriations and the administration had indicated its intent to end the program in order to offset other spending.
According to DOE officials, in May 2019 the ATVM program revised its application process and guidance in order to improve the applicant experience and better ensure that only viable applications are submitted. In particular, the ATVM program now strongly encourages potential applicants to participate in “pre-application consultations” in order to “informally address issues and materials that are needed to meet the standards of an acceptable application” and provide a preliminary assessment of whether an application warrants submission. According to DOE officials, the new process is intended to yield more complete and viable applications that can enter the due diligence process more expeditiously.
During due diligence, the ATVM program conducts more detailed technical, financial, and legal evaluations and determines whether an applicant should be provided preliminary terms and conditions or rejected. As of March 2020, no applications had advanced to the due diligence stage. ATVM officials had conducted over 40 consultations, and one new application seeking $450 million had been submitted since the announcement of the new process. In addition, ATVM considered two potential applicants to be in its “Business Development Pipeline” and likely to submit an application in the future. Seven applications pre-dating the new process remain on the ATVM application list. All seven date from 2016 or earlier and DOE’s comments on their status have not changed since December 2018.
In the President's fiscal year 2021 budget, the administration proposed elimination of the ATVM loan program and cancellation of its credit subsidy appropriation. The proposed elimination stated that no new loans had been closed since 2011 and that "efforts to increase the attractiveness of the program to potential borrowers have not yielded increased loan activity." The budget request also stated that the relative inactivity of this program indicates it is "ineffective at attracting borrowers with viable projects who are unable to secure private sector financing." Determining whether funds will be used is important, particularly in a constrained fiscal environment, as unused appropriations could be rescinded or go toward other government priorities.