Small, California-based start-up automaker XP has filed a lawsuit against the Department of Energy that accuses the Department of outright favoritism to major established car manufacturers for federal grants and loans. The grants and loans are part of a program to encourage the development of electric vehicles, and currently only Ford, Fisker Automotive, Nissan, and Tesla Motors have been awarded any loans or grants.

XP, who have been developing a partially inflatable-bodied electric car, says in their complaint

XP is seeking to have applicants who were "targeted" receive fair re-reviews, in a transparent manner, if they so desire. Investigations have shown that DOE officials intentionally stalled numerous applicants' reviews in order to force them out of business and protect favored players.

Other fledgling automobile companies are referenced as being targeted as well:

Unfairly processed applications, based on public statements in national media, include: A loan request under this program was denied for Carbon Motors Corporation in March 2012 after the latter had spent 2 years prior addressing the DOE's concerns. Complaints by Carbon Motors have been widely published.

Aptera Motors‘ initial application was denied because its product was a three- wheeled vehicle; the wording on the program was modified to allow high-mileage three-wheelers and Aptera reapplied, however the company went out of business before the DOE responded to their second application. Complaints by Aptera have been widely published.

Bright Automotive, who filed their application in 2008, went out of business in March 2012 after waiting 4 years for the DOE to respond and being unable to sustain continued operations. Complaints by Bright have been widely published.


The complaint also suggests that other government agencies were aware of the corruption and favoritism, and XP claims that once they made their complaints public, they were subject for further targeting:

XP has received information demonstrating that the unprecedented number of failures in the DOE program relative to what DOE officials have claimed to be "the most expensive and extensive due diligence in history" is explained by manipulated reviews, in the due diligence effort, on behalf of what the United States Government Accountability Office (GAO) investigations found to be "favoritism" in published investigation reports. A senate ethics investigation states, in published reports, that "negligence and mismanagement by DOE officials" was a regular occurrence.

After XP staff first reported the incidents, becoming "whistle-blowers", by reporting the evidence to GAO, Justice Department, The White House Press Office and The Senate Committee on Energy and Natural Resources, among others, they received threats and personal attacks. Over time, the volume of third party investigations, which have validated the charges of questionable acts by DOE staff have become voluminous. Within accordance, XP demands "Whistle-Blower" protections and offsets under applicable laws.


Full text of the complaint is available here.

The Department of Energy has yet to publicly comment on the charges. There's two sides to this, of course, but it does seem especially perverse that the smaller companies, the ones who could benefit the most from the grants and loans, were being targeted.