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.