Not much additional funding since 2009
President Barack Obama did not make much progress on his pledge to invest in fuel efficient vehicles beyond his first year in office.
Legislation reauthorizing Department of Energy funding died in the 2016 lame-duck session.
In 2007, Congress authorized $25 billion in loans to automakers to develop fuel efficient cars and promote domestic manufacturing, but it didn't fund the Advanced Technology Vehicles Manufacturing Loan Program until early 2009. That measure appropriated $7.5 billion to cover the subsidy costs) and $10 million to cover implementation.
Under the program, the Energy Department awarded $8.4 billion to five companies: Fisker, Ford, Nissan, Tesla and the Vehicle Production Group.
But the program came under fire when two of its debtors declared bankruptcy in 2013. The Energy Department was only able to recover $53 million of a $526 million loan to Fisker, and a $50 million loan to the Vehicle Production Group was sold for just $3 million at auction.
The program is still authorized to provide $16.6 billion in loans. After factoring in subsidies and pending applications for loans, there remains about $4.2 billion, according to the Government Accountability Office. It seems unlikely that these loans will be approved in the remaining days of the Obama administration.
The program has weathered several legislative discussions about scaling back the funds or defunding it altogether (summarized here in a Congressional Research Service report).
A 2015 bill to provide $1.6 billion for funding went nowhere, while a 2016 bill to expand eligibility for the program (among other things) died after time had run out to resolve differences in the House and Senate versions.
Outside of the manufacturer loan program, the Energy Department has also provided hundreds of millions of dollars for research and development for fuel efficient vehicle technologies, including $58 million in 2016, $55 million in 2014, $45 million in 2013, $8 million in 2012, and $175 million in 2011.
These grants were awarded to an array of public and private sector institutions, so it's difficult to tally just how much went to manufacturers.
Direct funding, however, has been limited to the 2009 authorization, said Lowell Ungar, the senior policy analyst with the American Council for an Energy-Efficient Economy. "That's when Congress was willing to appropriate large amounts of money. So that's a reflection of Congress, not the administration."
Ungar pointed out that the administration has pursued energy efficiency through a different means: raising fuel economy standards.
Still, Obama has come up well short of the $50 billion in funding promise. We rate it Promise Broken.
The Hill, "DOE overhauls controversial vehicle tech loan program," April 2, 2014
Congressional Research Service, "The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program: Status and Issues ," Jan. 15, 2015
Interview with Lowell Ungar
No way to measure total private investment
In other Obameter items, we've tracked the federal government's progress helping car makers build fuel-efficient vehicles. As a candidate, Barack Obama promised to provide loan guarantees and tax credits to the industry. He also promised to invest in all-electric and plug-in hybrids, both by purchasing them as federal vehicles and by handing consumers tax credits.
What is harder to evaluate is an Obama campaign promise to leverage those efforts for additional private investment, to the tune of $50 billion. Last time we assessed this promise, we mistakenly said Obama promised that amount in public dollars. A closer reading of the exact language shows he was saying he would try to spur $50 billion in investment from auto manufacturers.
Unfortunately, no one aggregates this kind of information, so far as we can tell. As we noted in a previous post, the administration has loaned $8.4 billion to auto companies such as Nissan North America and Ford Motor Company. The loans help finance the production of vans that run on compressed natural gas, electric-vehicle battery packs, electric motors, and two types of plug-in hybrids.
In 2007 Congress set aside $25 billion for this program, though the Energy Department did not award any loans until 2009, under the Obama administration. The Energy Department indicates that at least two of the program's loan recipients -- Tesla and Fisker Automotive -- raised slightly more than 100 percent of their loans' worth in private investment, about $1.3 billion in total.
We also noted that the American Recovery and Reinvestment Act, better known as the economic stimulus, gave $2.3 billion in tax credits for investment in advanced energy manufacturing. Though not specific to manufacturers of cars and their parts, the government has assigned that money for 183 projects, with recipients including the American branches of Volkswagen, Honda and Mitsubishi, as well as lesser-known fuel-cell manufacturers, biofuel facilities and electric-vehicle auto plants. Again, we cannot quantify how much, if any, the private investment occurred because of these tax credits.
The other difficulty in evaluating this promise is the question of a causal effect: Would the company have invested in fuel-efficient manufacturing even without the loan or tax credit? Since not enough evidence is available, we will leave this as In the Works. If we learn of anything that would nudge this to Broken or Kept on the Obameter, we'll revisit the promise.
Internal Revenue Service, Section 48C Tax Credits, accessed Aug. 19, 2012
Energy Department, Loan Programs Office, Advanced Technology Vehicles Manufacturing Loan Program, accessed Aug. 19, 2012
Energy Department, Fisker, Tesla, and American Auto Innovation, Oct. 20, 2011
Administration loans go to Ford, Nissan, Tesla
During the presidential campaign, Barack Obama promised to provide "support to domestic automakers to invest $50 billion to retool their manufacturing facilities in America to produce (fuel efficient) vehicles." During his two years in office, his administration has taken steps to carry out that promise.
The groundwork for this promise was actually laid under his predecessor. The Energy Independence and Security Act of 2007, signed by President George W. Bush, established the Advanced Technology Vehicles Manufacturing Loan Program, which offers direct loans "to support the development of advanced technology vehicles and associated components in the United States." Advanced technology vehicles are designed to meet a higher standard -- 125 percent of the federal fuel efficiency standards for 2005.
A congressional spending bill enacted on Sept. 30, 2008, appropriated $7.5 billion to support a maximum of $25 billion in loans, and also provided the Energy Department with $10 million for program administration costs.
That's where the Obama administration's role begins. On June 23, 2009, the Energy Department announced $8 billion in competitively bid, conditional loan commitments for the development of advanced vehicle technologies
The loan commitments included $5.9 billion for Ford Motor Co. to increase fuel efficiency capabilities of 13 models of cars made in factories in Illinois, Kentucky, Michigan, Missouri, and Ohio; $1.6 billion to Nissan North America, Inc. to retool a battery manufacturing facility in Smyrna, Tenn.; and $465 million to Tesla Motors to manufacture electric drive trains and electric vehicles in California. The administration promised to make additional loans at a later date.
The amount allocated for this program -- $25 billion -- is only half the amount Obama promised during the campaign, so to become a Promise Kept will require authorizing additional funding. But he'll have two more years to fight that battle. For now, the loan arrangements made already qualify this promise for a rating of In the Works.
Department of Energy, ATVM program home page, accessed Jan. 12, 2011
Department of Energy, "Obama Administration Awards First Three Auto Loans for Advanced Technologies to Ford Motor Company, Nissan Motors and Tesla Motors" (news release), June 23, 2009
Interview with Adam W. Abrams, White House spokesman, Jan. 11, 2011
We add a new promise to the Obameter
We've added a new promise to the Obameter.
On the campaign trail, President Barack Obama said he would give car manufacturers about $50 billion to upgrade their facilities to make fuel-efficient cars. Up until now, we included that pledge as part of Promise No. 449, to increase vehicle efficiency by 4 percent annually.
The Obama administration put that mandate on the books on April 1, 2010, so we moved it to a Promise Kept. But given that the second part of his promise, to invest in manufacturing, isn't entirely related to his pledge to increase fuel efficiency, we decided to split the two items.
So, where does Obama's promise to give auto manufacturers $50 billion to retool their manufacturing facilities to make fuel-efficient cars stand? We're looking into it and will have an update posted as soon as we find out.
Until then, stay tuned.