U.S. House of Congress approves bill that doubles DOE incentive program to $50 billion
The Bush administration enacted a law that allows the Department of Energy to disburse about $25 billion through the Advanced Technology Vehicles Manufacturing incentive Program. After seating on the funds for eight months, DOE released a big chunk of the money last week.
The move in the House was made by passing the bill with the legislation on climate-change. The proposal will then go to the Senate before being enacted as a law. A similar bill was rejected by the Senate in 2008.
In the program, car manufactures will be able to get government loans of as much as 80% to cover for the cost of R&D, and production of highly efficient vehicles. The payback is stretched to 25 years with approximately 4% of interest. The company needs to issue security interest for the acquisition of any property using the funds.
Assembling a car using the DOE grant has a requirement of making a car that is 25% more efficient than the current standards. So performance cars, trucks, and SUV is out of the picture.
The bill is also looking into the improvement of the network for EVs and hybrids. Charging stations must be ideally constructed in garages, parking lot, fuel stations, and several stops along the highway.
The first beneficiaries of the loan were Ford, Nissan, and Tesla. Ford received $5.9 billion to develop a compact electric car. Nissan has $1.6 billion which will be used in constructing its Tennessee factory for EV’s. The $465 million received by Tesla is set to be a catalyst for the Tesla Model S in the works right now.