| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
Just In Time for Tesla's Latest Losses, Senate Wants to Waste More on EVs
Nothing of greater significance can be said about the Department of Energy’s Advanced Technology Vehicles Manufacturing loan program other than it was a wasteful failure. Nonetheless 85 U.S. Senators have determined that an additional, similar $1.6 billion program must be created, as part of a larger energy bill that passed last month.
Those who favored the extension of corporate welfare for alternative energy-fueled automobiles justified their decision with the same phony claims they made ten years ago when the ATVM program was established.
“Our measure will help manufacturers and suppliers research and develop innovative technologies to make the next generation of fuel-efficient vehicles, spurring job growth and reducing our dependence on foreign oil,” said Democrat Sen. Debbie Stabenow of Michigan.
NLPC has documented the stumbles of the stimulus-fueled ATVM program – which still has $16 billion available – extensively. Two of its loan recipients, Fisker Automotive and Vehicle Production Group, went bankrupt and lost $139 million and $50 million of taxpayer money respectively. Two others, Nissan ($1.44 billion loan) and Ford Motor Company ($5.9 billion loan), received billions of dollars to spur electric vehicle production, but none of their models took off and none would be sustainable without massive government subsidies.
The one company that the Department of Energy has proclaimed as a true success story for the ATVM program is Tesla Motors, simply because it managed to pay back its $465 million loan. But that factor alone is meaningless, as the company has a track record of only showing (dubious) gains when it is able to take advantage of other government subsidies and tax credits. Further, on Wednesday Tesla announced yet another dismal quarterly earnings report, with losses for the first quarter jumping 84 percent to $282 million versus the same period last year. The $2.13-per-share loss shocked Wall Street analysts.
Now the Senate wants pile another boondoggle on top of the blundering ATVM program. The evidence that ATVM is unworthy of prolonged life – much less be enlarged, essentially – extends beyond the poor performance of its loan recipients.
Three years ago the publicity surrounding the program got so bad that the Government Accountability Office determined “green energy economy” entrepreneurs no longer wanted any part of it. At the time GAO’s director for Natural Resources and Environment undertook an audit/investigation that evaluated three types of DOE loans that were popularized during the heyday of the Obama stimulus – one of them was ATVM. Congress had approved $25 billion – which does not expire – that the DOE could loan to alternative vehicle manufacturers.
After the horrid publicity surrounding the previous recipients of ATVM money, GAO discovered that applicants – or prospective applicants – did not want to be associated with the program. After the five companies mentioned above were granted roughly $8.4 billion, the remaining $16 billion sat unused for at least two years. GAO interviewed many applicants and prospective recipients who could have been eligible for the ATVM funds.
Those interviewed cited predictable reasons for their hesitance or refusal to accept government funding, including bureaucratic red tape, reporting requirements, uncertainty about credit subsidy costs, lengthy DOE review times, and the expenditure of time and resources for an uncertain outcome. But many were also deterred by bad publicity surrounding previous loans via ATVM and other closely related programs.
“Some applicants noted that the Solyndra default and other problems have created a negative public image and political environment…,” the GAO investigator reported, “which has made its future less certain and DOE more cautious about closing on loan guarantees.” Citing ATVM specifically, the investigator wrote “as the program is currently implemented by DOE, the costs of participating outweigh the benefits to their companies….They believed the negative publicity makes DOE more risk-averse, or makes companies wary of being associated with government support.”
After President Obama’s first Energy Secretary, Steven Chu, was harshly criticized by companies that were strung along by DOE loan evaluators only to be denied approvals, ATVM went dormant until new Secretary Ernest Moniz replaced him in mid-2013. Almost immediately he announced his intent to revive the program, with renewed hope to generate interest from manufacturers.
“We are looking at what a new (loan) solicitation might look like,” Moniz said in August 2013.
What it looked like instead was another government corporate welfare giveaway. Last March DOE announced the first recipient from the “revived” ATVM program: $259 million for mega-conglomerate Alcoa. The only problem was that the project funded by the loan was already underway for 19 months and was first revealed almost two years earlier. Thus, rather than come to the aid of a fledgling “green” company in need of capital, DOE forked over taxpayer cash to a multi-billion dollar corporation for a project well advanced in its construction.
Nonetheless in the bipartisan infinite wisdom of the U.S. Senate, the ATVM program – a failure initially and a fraud in its “revival” – must be extended and expanded with more taxpayer funding. Obviously not even the worst of the worst federal programs can be slain.
Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.
Source: http://nlpc.org/stories/2016/05/06/just-time-teslas-latest-losses-senate-wants-waste-more-evs
