Advanced Technology Vehicles Manufacturing Loan Program

Advanced Technology Vehicles Manufacturing (ATVM) Loan Program is a $25 billion direct loan program funded by Congress in fall 2008 to provide debt capital to the U.S. automotive industry for the purpose of funding projects that help vehicles manufactured in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil. Of the 108 requests made, 5 were approved to receive $8.4 billion, with the majority of that amount under repayment.

The loan program was authorized under section 136 of the Energy Independence and Security Act of 2007, which provided the program with $25 billion in loan authority, supported by a $7.5 billion appropriation to fund the credit subsidy, or the 30% risk profile expected for projects of this type. To qualify, automakers and eligible component manufacturers must promise to increase the fuel economy of their products by 25% over the average fuel economy of similar 2005 models, and apply the loans to future investments "reasonably related to the reequipping, expanding, or establishing a manufacturing facility in the U.S." In distributing the loans the DOE may decide which technologies it believes are most promising and deserving of assistance. Loan recipients must also be "financially viable" for the length of the loan. Given 60 days by congressional statute to issue an interim final rule, the Department of Energy (DOE), responsible for overseeing the program, finalized the rule 36 days later on November 5, 2008 (compared to 18 months usually needed for such rule making). This program is unrelated to the United States Treasury Department's Troubled Asset Relief Program (TARP) which has been providing bailout funding to two of the big three U.S. automakers to reduce the effects of the 2008–10 automotive industry crisis on the United States. The two programs were enacted during the Automotive industry crisis of 2008–10, but with different purposes.

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