At the dawn of 2009, the U.S. had just two factories manufacturing advanced batteries, producing less than 2% of the world’s supply. But with recent investments, the U.S. share of global production capacity for advanced batteries will grow sharply by 2015.
– Daniel J. Weiss and Jackie Weidman in a CAP repost
Our story begins on December 7, when The Washington Post published a skeptical assessment of government investments in advanced, efficient vehicles and related technologies under the Advanced Technology Vehicle Manufacturing program and grants from the American Recovery and Reinvestment Act. The Post questioned whether and when taxpayers would see a return on their money, and it noted that some analysts “warn that some federally subsidized companies could be forced to shut down in coming months.”
In this piece we will respond to The Post’s criticisms while clarifying why we need to maintain investments in this program to stay globally competitive in the thriving advanced vehicles industry and build a market for clean cars that reduces our dependence on costly oil imports. The Post piece also ignores the Obama administration’s recent rules to double car fuel economy standards between now and 2025, which will increase demand for advanced, efficient vehicles.
Why the program matters
Let’s start with clarifying what the program is.
The Advanced Technology Vehicle Manufacturing program provides direct loans to support production of advanced, efficient vehicles and associated components such as advanced batteries. President George W. Bush originally signed it into law.
The program was created to help domestic auto manufacturing facilities retool to build significantly cleaner cars. So far, $5.4 billion in direct loans from the Department of Energy have been granted to six companies under the program. The loans will result in almost 42,000 jobs in 11 states, primarily around manufacturing facilities.