- Department of Energy Makes it Easier to Access Low-Interest Financing
- May 6, 2014 | Author: Omar A. Lucia
- Law Firm: Foley & Lardner LLP - Detroit Office
The U.S. Department of Energy is overhauling a $16 billion low-interest financing program to fund new technologies such as efficient engines, lightweight materials, and low-friction tires. This program, titled the Advanced Technology Vehicles Manufacturing Loan Program, is being modified to further help suppliers access low-interest loans. In a recent announcement, Energy Secretary Ernest Moniz said that the ATVM program presented “an opportunity to hit the accelerator on U.S. auto manufacturing growth.”
Since the creation of the ATVM program, the Department of Energy has provided about $8.4 billion in low-interest financing to OEMs such as Ford, Nissan, Tesla Motors and Fisker Automotive. While suppliers were always eligible to receive similar low-interest loans under the program, none actually took advantage of the program. Under the updated program, suppliers will find it easier to access these low-interest loans to fund production of new, more efficient technologies.
To qualify for a low-interest loan, a supplier must contribute to vehicles that are 25 percent more efficient than their 2005 equivalent vehicle counterpart. However, a company may still be granted access to this low-interest financing if a component is, from time to time, used in vehicles that don’t meet the efficiency improvement standard. Recent changes to the ATVM program, such as legal clarifications regarding supplier access and the creation of an online application portal, are all aimed to facilitate easier access to the low-interest loans.
The Department of Energy’s Loan Programs Office has said that it has been actively promoting the new program to suppliers in the hopes of providing assistance in meeting the challenges of next generation technologies.