Energy-Efficient Car Funding...A Look Where the Rubber Meets the Road.
The New York Times has an article now about what's happening with the $25 Billion that were set aside for loans through the Energy Department for automobile companies and start-ups to hasten the arrival next-generation auto technology using batteries.
As of right now, the amount of money dispersed has been: $0.00.
But it's not for lack interest in companies looking for the loan money:
the Advanced Technology Vehicles Manufacturing Loan program, established in 2007, has received applications from 75 companies, including start-ups as well as the three Detroit automakers.
75? Not surprising when the government is waving the green bills. So what's the hold-up?
According to Lachlan W. Seward, the director of the program, which has gotten repeated pressure from politicians as well as hungry recipients wondering where the precious funds are, they are moving as fast as they can "in a responsible manner". The program claims to be understaffed but is looking to simplify paperwork and hire more people. The first funds are expected to be dispersed in April or May.
There are complicating factors. Money can be given only to companies and projects that are deemed “financially viable.” G.M. and Chrysler, which have applied for a combined $13 billion from the Energy Department, must wait until the end of March for the Obama administration to decide whether the companies’ restructuring plans would make them viable.
Many smaller companies are worried that the money will mainly end up going to Detroit auto-makers. That remains to be seen...but I wouldn't doubt it.
But I found this interesting:
“No one else out there will take on this risk,” said Mr. Seward.
Russ Roberts found it interesting as well
No one else will take on this risk? GM has put $2 billion into the Chevy Volt. Toyota is working on a battery powered car. The Tesla is out there. There are all kinds of other efforts going on, all financed privately and all actually doing something. But he's partly right. If the government program gets big enough, all those efforts will stop and everyone will turn to Mr. Seward.
Personally, the words "Tesla" and "Volt" popped up right away in my mind as well. The Tesla is already on the road and the Volt is nearing its launch.
One battery manufacturer even said:
“Getting the money would be a big step for us,” said Mr. Burns. “We can function without it. But with it, we’d be on steroids.”
Extra money is always nice. Sure. Hard to argue with that. I function without government loans as well. I could be on steroids with it as well. I guess I should get in line.
Bottomline, IMO: The technology is on its way. It's coming. We're no way near "at formula" here. We've come a long way with this...and other technologies. This funding is simply a short cut to more money. Will it matter in that end? Will it make a noticeable impact on the market for green cars that wouldn't be there otherwise? Hard to say. I'm skeptical.
One thing is for sure: It's making a noticeable impact on how these companies go about looking for financing. That's a definite.