DOE Loans Announced; Tesla Gets Funds!

After months of speculation and waiting, the day has finally come. The U.S Department of Energy has announced it's approval of loans from the Advanced Technology Vehicle Manufacturing program (ATVMP).

The ATVMP is a bill passed by Congress that awards $25 billion in loan guarantees to auto manufacturers. It is intended to spur alternative fuel development. Originally, it was expected that the Big Three automakers would benefit biggest from the program.

Given their state of bankruptcy, overall financial condition and the fact that  they received bailout loans, both were made ineligible to receive ATVMP funding.

Out of the three automakers announced today, Ford will be getting the most. $5.9 billion has been approved out of the - whoa- $11 billion it applied for. Nissan got it's entire $1.6 billion request granted, and will use the funds to modify it's Smyrna, Tennessee, manufacturing plant to produce 150,000 electric vehicles and 200,000 lithium-ion battery packs.

The fact that GM and Chrysler were ineligible freed up a lot of money in the program for other funding requests. I think that's a good thing too because it will help diversify DOE investment and maybe give more of a chance to small manufacturers like Tesla and Fisker (which has also applied for the loans).

Tesla has gotten all the amount it has requested, a total of $465 million. $365 million will be used for the Model S's engineering as well as setting up/converting the production plant . $100 million is earmarked to setup an electric powertrain plant that will make electric motors, chargers and battery packs for both Tesla as well as other automakers (Daimler?).

One of the requirements of the DOE program is that they use "brown field" sites which means an existing manufacturing site as opposed to a new one ("green field").

Tesla is currently in the late stages of negotiations for the plant, rumored to be in Long Beach, California. Remarkable developments to be sure; I was skeptical when the request was originally announced. Tesla deserves to get a chance at succeeding though with it's new Model S so I'm really pleased!