Fuel Efficiency Loans in GOP Crosshairs

The House of Representatives voted today to cut $1.5 billionfrom $4 billion in remaining credit subsidies for the Department of Energy’s Advanced Technology Vehicles Manufacturing program. The proposed cut was attached to a House Republican stopgap funding bill, which would avert a potential September 30 government shutdown and attempt to offset federal disaster relief aid by cutting the ATVM program. So far, less than half of the $25 billion slated for the program has been awarded, going to carmakers like Ford ($5.9 billion,) Nissan ($1.9 billion,) Fisker ($529 million,) and Tesla ($465 million,) to expand their advanced technology fuel efficient vehicles offerings.

A $1.5 billion cut to the program would actually result in $5 billion less in clean car funding, since the money would be taken from a $7.5 billion dollar federal credit subsidy that allows the industry to take advantage of the low-interest loans. The House bill was promptly voted down by the Senate later in the day, but as the two congressional chambers work toward a compromise that would keep the full government running past next Friday, it is unclear whether slashing the AVTM’s appropriations will be on the table for negotiation.

Some Republicans have seized on the recent scandal surrounding failure of California solar firm Solyndra as evidence that so-called green jobs programs like the AVTM don’t work. “The government should not be picking winners and losers—that’s what they’re doing with Nissan, Tesla and Fisker,” said Florida representative Cliff Sterns to The New York Times earlier this week. Democrats argue that the program has already saved or created nearly 40,000 jobs, with as many as another 60,000 still in the offing.

Meanwhile, after publishing a blog postin support of AVTM earlier this week, Tesla is reported to be seeking another loan from the program. No details are available about the size of the request or what it will be used for, but speculationhas it that it could go toward the forthcoming Model S sedan (expected in 2012,) or Model X electric SUV model Tesla plans to release in 2014.