Why Is A Specific Mpg A Requirement For Atvm Loan?

[grampi]

I don't understand why achieving a specific MPG figure is a requirement for securing the gov loan. It's obvious based on the vehicle's size, weight, and aerodynamics that it's going to achieve higher MPG figures than any other fully enclosed vehicle on the road today, so why the stringent MPG requirement?

 

[floydv]

The 75 mpg requirement was part of the attempt to allow enclosed two and three-wheeled ultra efficient vehicles like Aptera to qualify for the ATVM loans. Until then, ATVM loans were only available to four-wheeled cars and parts suppliers that could demonstrate technology which incrementally improved mileage over conventional fleet averages. See the Aptera release below:

NEW FEDERAL LEGISLATION MAKES APTERA
ELIGIBLE FOR MILLIONS FROM DOE LOAN PROGRAM

Dept. of Energy's fuel efficiency loan program expands to make companies like Aptera
– with its ultra-high mileage, three-wheel electric vehicle – eligible for funds

VISTA, Calif. (Oct. 29, 2009) -- Aptera Motors, maker of the three-wheeled, all-electric 2e that delivers the equivalent of up to 250 miles per gallon, is updating its loan application for resubmission to the Department of Energy after President Obama signed a bill that makes ultra-efficient, two- and three-wheel vehicles eligible for federal loans.

The new measure, approved as a part of an energy and water appropriations bill, was originally sponsored by Rep. Brian Bilbray (R-Calif.) and Rep. Adam Schiff (D-Calif.) and received overwhelming bi-partisan approval in the House and Senate. It stipulates that any manufacturer of enclosed two- or three-wheeled vehicles that carry at least two people and get 75 miles per gallon are now eligible for DOE funding. Aptera's original submission to the DOE's Advanced Technology Vehicles Manufacturing Incentive Program was rejected Dec. 31, 2008 because the program was initially drafted to only include passenger vehicles, which, by federal definition, have four wheels.

"This bill shows Congress and the Obama Administration support real American green tech innovation and are behind companies that create manufacturing jobs in America," says Aptera CEO Paul Wilbur. "Aptera's goal is to be the world benchmark for efficiency, with a portfolio of vehicles designed and manufactured right here in the U.S. Our hope is that we can use the DOE loan to accelerate our march to that goal."

Vista, Calif.-based Aptera, which plans to enter full production in 2010 with its two-passenger Aptera 2e, expects to directly employ 1,500 people and create thousands of support roles for American workers from auto parts and components companies. The 2e, with a price range of $25,000 - $40,000, will require no unique charging infrastructure, delivering a range of 100 miles by simply plugging into a conventional 110 volt or 220 volt household outlet.

"Aptera's corporate strategy has always been to go to market on private funding, but the prospect of this new legislation gives us a means to accelerate our plans for national brand expansion," says Wilbur.

 

[Johnny Acree]

The simple answer is. It's their program, so they get to make up the rules.

 

[grampi]

Okay, so it looks like according to this, the Elio must only be able to achieve 75 MPG. It should be fairly clear by now the Elio should be able to make that number fairly easily, even on a bad day, and they should be able to determine this (through calculations and projections) without actually having the vehicle attain these numbers, so I still don't see why it's taking them so long to approve the loan...

 

[Ekh]

Okay, so it looks like according to this, the Elio must only be able to achieve 75 MPG. It should be fairly clear by now the Elio should be able to make that number fairly easily, even on a bad day, and they should be able to determine this (through calculations and projections) without actually having the vehicle attain these numbers, so I still don't see why it's taking them so long to approve the loan...

Once burned (by Fisker) twice shy.

Or, fooled twice (Fisker and Solerna) quadruply shy.

More likely 75 mpg is a quantum improvement, not an incremental improvement - and that is what these loan guarantees are for.

Or maybe a combination of fear AND. desire.

 

[floydv]

Okay, so it looks like according to this, the Elio must only be able to achieve 75 MPG. It should be fairly clear by now the Elio should be able to make that number fairly easily, even on a bad day, and they should be able to determine this (through calculations and projections) without actually having the vehicle attain these numbers, so I still don't see why it's taking them so long to approve the loan...

The ATVM loan is structured around two main requirements, the first being the 75 mpg requirement. The second and more challenging one is to demonstrate financial viability:

3) FINANCIAL ELIGIBILITY REQUIREMENTS FOR APPLICANTS [10 CFR 611.100(A)(2)]:

In order for an applicant to be financially eligible under the ATVM Program, the applicant “[m]ust be financially viable without the receipt of additional Federal funding associated with the proposed eligible project”.

a) "Financially Viable”: The applicant will be deemed “financially viable” for purposes of 10 CFR 611.100(a)(2) if (i) there is a reasonable prospect that the applicant will be able to pay principal and interest as and when due under the ATVM Program loan and (ii) the applicant has a net present value that is positive, taking all costs, existing and future, into account. (See definition of “financially viable” in 10 CFR 611.2.) 10 CFR 611.100(c) sets forth a non-exhaustive list of the factors considered by the ATVM Program in determining whether the applicant is financially viable.

b) “Additional Federal Funding”: 10 CFR 611.100(d) lists forms of direct and indirect assistance from the Federal government which would be considered “additional Federal funding” for purposes of 10 CFR 611.100(a)(2).

 

[RUCRAYZE]

Vista, Calif.-based Aptera, which plans to enter full production in 2010 with its two-passenger Aptera 2e, expects to directly employ 1,500 people and create thousands of support roles for American workers from auto parts and components companies. The 2e, with a price range of $25,000 - $40,000, will require no unique charging infrastructure, delivering a range of 100 miles by simply plugging into a conventional 110 volt or 220 volt household outlet.
Bold underline me, 1500 people, seems so familiar. Time as a factor bringing product to market, continues to work against me. I thought it was strange that every time I went to the bathroom, the light went on automatically, until my kids told me I've been peeing in the refrigerator.
I can see my kids dragging me into the house as I continue to look for the passenger door!

 

[grampi]

The ATVM loan is structured around two main requirements, the first being the 75 mpg requirement. The second and more challenging one is to demonstrate financial viability:

3) FINANCIAL ELIGIBILITY REQUIREMENTS FOR APPLICANTS [10 CFR 611.100(A)(2)]:

In order for an applicant to be financially eligible under the ATVM Program, the applicant “[m]ust be financially viable without the receipt of additional Federal funding associated with the proposed eligible project”.

a) "Financially Viable”: The applicant will be deemed “financially viable” for purposes of 10 CFR 611.100(a)(2) if (i) there is a reasonable prospect that the applicant will be able to pay principal and interest as and when due under the ATVM Program loan and (ii) the applicant has a net present value that is positive, taking all costs, existing and future, into account. (See definition of “financially viable” in 10 CFR 611.2.) 10 CFR 611.100(c) sets forth a non-exhaustive list of the factors considered by the ATVM Program in determining whether the applicant is financially viable.

b) “Additional Federal Funding”: 10 CFR 611.100(d) lists forms of direct and indirect assistance from the Federal government which would be considered “additional Federal funding” for purposes of 10 CFR 611.100(a)(2).

Again, I don't see the reason for dragging this process out for so long. Either Elio meets the requirements, or they don't. Shit, or get off the pot....

 

[floydv]

Again, I don't see the reason for dragging this process out for so long. Either Elio meets the requirements, or they don't. Shit, or get off the pot....

Perhaps it's an issue of timing. If DOE were required to make a determination last year, they may have reached a different conclusion back then, which could be a different conclusion today and likely a different conclusion in several months. Elio's financial viability has been changing over time. In light of several bad loans, perhaps DOE is waiting for an optimal point at which issuing a loan to Elio is much less speculative and more defensible for them.

It may be a case of "be careful what you ask for."

 

[WilliamH]

Perhaps it's an issue of timing. If DOE were required to make a determination last year, they may have reached a different conclusion back then, which could be a different conclusion today and likely a different conclusion in several months. Elio's financial viability has been changing over time. In light of several bad loans, perhaps DOE is waiting for an optimal point at which issuing a loan to Elio is much less speculative and more defensible for them.

It may be a case of "be careful what you ask for."

Perhaps it's because that is a requirement of 42 USC 17013 which the trash at the DOE can't change. You can read it in
42 USC 17013 Advanced technology vehicles manufacturing incentive program
(a) Definitions
(5) Ultra efficient vehicle

DOE may administer it, but it is a Congressional program.
Source ---> http://energy.gov/sites/prod/files/2014/04/f14/USCODE-2011-title42-chap152-subchapI-sec17013.pdf <---