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USA: Opinion: The problems with the DOE green car startup loans

Over the past year I’ve seen a recurring scenario with the Department of Energy’s green car loans, and it’s not a pretty sight. Here’s the picture: a young, sometimes promising — sometimes not promising — electric car or alternative vehicle startup moves to the late stages of the DOE’s green car loan award process. The startup seems to be so sure they will get the loan that they manage their business around it, and then the DOE either places the company in award purgatory — a permanent holding pattern — or ends up denying the loan. A lot of times, the result of this situation has been that a company closes shop or desperately struggles to look for other sources of funding.

Over the past couple of years, this type of scenario has happened for electric car maker Think Automotive’s U.S. arm (which went bankrupt), electric car company Coda Automotive, Aptera (which shut down), plug-in hybrid van maker Bright Automotive (which shut down) and energy-efficient plastic car company Next Autoworks (formerly V-Vehicle, which shuttered its planned factory). Electric vehicle maker Fisker Automotive was awarded a loan, but was only able to draw down part of the loan after its first car was delayed significantly.

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