Automakers would have to fund a larger share of future green technology projects if the Trump White House’s budget blueprint passes as written.
The administration proposes to do away with a little-used — and sometimes controversial — U.S. Energy Department loan program, as well as a grant program dedicated to spurring advanced fuel-saving technologies.
Contained in the budget blueprint is the elimination of the federal government’s Advanced Research Projects Agency-Energy program, known as ARPA-e. That initiative, created in 2007, doles out $300 million each year for environmentally friendly research initiatives.
While automakers tapped into the program, a number of Silicon Valley startups used the fund as seed money for marketable technologies. Green energy companies also received money from the program.
In light of Trump’s intent to reduce funding to the Environmental Protection Agency, as well the government’s plan to re-open the EPA’s midterm review of 2025 fuel efficiency targets, it’s not surprising the proposal has met fierce criticism. In response, the Trump administration claimed that the “private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.”
ARPA-e isn’t the only federal initiative poised to bite the dust, but it’s arguably the most controversial of the proposed eliminations. Also on the chopping block is the Advanced Technology Vehicle Manufacturing loan program, created in 2008. That program, unused since 2011, became a political lightning rod after low-cost loans were awarded to ill-fated Fisker Automotive and another failed startup. Taxpayers, still recovering from the recession, took a bath.
Three existing automakers received billions of dollars from the program. Ford walked away with a $5.9 billion loan in 2009, while Nissan saw $1.45 billion the following year. Also in 2010, upstart Tesla Motors claimed $465 million from the program’s $25 billion pool.
While it hasn’t been used in years, the program’s existence provides hope and opportunity to companies, argues the National Resources Defense Council. The environmental advocacy non-profit has stated the program “plays a critical role in bringing promising technologies out of the lab and into the real world, bridging a funding gap that entrepreneurs call ‘the valley of death.'”