Congress Is Trying To Kill The Loan Program That Helped Tesla

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1st Gear: ATVM May Be DOA

The Advanced Technology Vehicle Manufacturing Program was an initiative of the later Bush-era Department of Energy that saw $25 billion in loans set aside for automakers to do research into alternative energy solutions for cars.


Roughly $8 billion was given to Ford ($5.9 billion), Nissan ($1.4 billion), and Tesla Motors ($465 million), the latter of which repaid its loans nine years early. Tesla of course, is a massive success for the program and considered an example of American ingenuity.

So why do Republicans want to kill the last $16.6 billion in funding?

Per David Shepardson:

“The budget rescinds all unobligated balances from the president’s stimulus green energy programs,” House Republicans said in a summary of their budget proposal. “The government cannot recover taxpayer dollars from failed projects like Solyndra, but it can protect taxpayers from being on the hook for future boondoggles.”

They're not entirely off-base here. The government invested in a ton of losers, including Fisker, which lost taxpayers roughly $139 million of the $520 million invested.


It was such a bad look (especially before an election year), that the Department of Energy just stopped giving people loans, which is why there's $16.6 billion left. The DOE says they're about to start rolling out more loans but... should they be allowed to?

I think so. The $16.6 billion was already allotted and it's not like that's the money that's going to save social security. It's chump change to Congress. To put that into context, it's roughly what we spent reimbursing Aaron Schock for travel to Katy Perry concerts.


Sure, a good chunk of the money we invested went nowhere, but think of all the things DARPA invested in before they got the Internet. One Tesla is worth it. If we can invest the other $16.6 billion and get another Tesla I say it's a good investment.

2nd Gear: Jaguar And... Buick... Best In Dealer Satisfaction


Buick is one of those brands that's just quietly kicking ass lately, even with a few months of poorer performance as the market shifts into truck/SUV mode. For example, J.D. Power's latest survey says that the near-premium GM brand had the best dealer service satisfaction for the second year in a row.

Jaguar was the best performing luxury brand, reports the Freep, which is less of a surprise given their improvement in every other thing they've done lately.


A couple of interesting tidbits in the report:

Dealers that offer an express lane for customers who do not schedule service appointments substantially outperform those that do not offer this option, the survey found. At dealerships with an express lane, 52% of customers said they spoke to a service advisor immediately, compared with 38% of those who took their car to a dealership without a fast lane.

And customers still book their appointments the old-fashioned way. Even though most dealerships offer online scheduling, only 9% book their appointments using the Internet compared with 73% who call for an appointment. Part of it is lack of awareness: 45% did not know they could schedule online.


I usually call to schedule appointments, actually, even though I use the Internet to do almost everything else.

3rd Gear: Russian Cars Are Dead


GM is officially closing its Russian plant as basically no mass market, non-luxury brand sees any kind of upside in the country in the short term.

From the WSJ:

“It’s not just the current conditions but also the long-term prospects for the market as we look ahead at our investment requirements,” GM President Dan Ammann said in an interview. “We need to be in a sustainable business model.”

The St. Petersburg plant, which opened in July 2008 producing the Chevrolet Captiva and Opel Antara, had a capacity of producing 98,000 vehicles. In 2012, GM announced plans to increase the capacity to 230,000, but the project stalled out the following year amid slumping demand.


That 2012 announcement shows just how recently people thought they'd be able to make money in a richer, more middle class Russia.

There's obviously an opportunity here for another automaker to step in once Russia actually does recover, but who knows when that is.


4th Gear: Will BMW Lose Profits And Sales Lead?


Yesterday, we told you that BMW was admitting it would see a slide in profits as it makes reinvestments in their model lineup. Today, from Reuters, we've got BMW saying they may lose ground to Audi and Mercedes... eventually.

To be fair, BMW has this weird conundrum wherein BMW is definitely the biggest if you count BMW and Mini together, but most people don't. No big deal as Mini isn't really a premium brand in the same way Smart isn't a premium brand.


Audi, however, has no Smart or Mini. What Audi does have is the A1, which is competitive with Mini's offerings.

Either way, BMW should stay in the lead at least this year.

5th Gear: Honda Piles Another 100K Cars Onto Existing Recalls


Honda is now entering the GM phase of recalls, wherein adding another 100,000 cars here or there doesn't really make a big difference in light of the huge mass of recalls you've already done.

Bloomberg is reporting that 104,871 Pilots, Accords, and Civics from various years are being included in the larger Takata airbag recall.


If you've got a Honda, just assume it needs to be taken in at this point.

Reverse: A Legend

On this day in 2005, John DeLorean, an innovative auto industry executive and founder of the DeLorean Motor Company, dies at the age of 80 in New Jersey. In the early 1980s, the DeLorean Motor Company produced just one model, the DMC-12, a sleek sports car with gull-wing doors that opened upward, before going bankrupt. John DeLorean was charged with drug trafficking in an effort to raise funds for his struggling company. Approximately 9,000 DMC-12s in total were produced. The car later became a collector’s item and received a big publicity boost when it was featured as a time-travel machine in the “Back to the Future” movies starring Michael J. Fox.



Neutral: Would You Kill ATVM?

Would you invest the other $16.6 billion or, as a taxpayer, have your $68 (on average) spent on something else?


Photo Credit: AP Images

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