Trump’s recently announced budget may sabotage the loan program that supports the U.S auto industry

According to the sources, the recent budget proposed by President Donald Trump is expected to sabotage the loan program that Ford Motor, Tesla Inc, and other auto manufacturers in the U.S have been using to make more environmental-friendly automobiles.

The advanced technology vehicles manufacturing loan program is offered by the U.S Energy Department. As per the program’s website, the loan has so far financed $8 billion worth of production of environmental-friendly vehicles by multiple automakers. In Trump’s budget proposal for 2021, however, the loan program is likely to take a massive hit.

U.S startups in the electric vehicle niche such as Lordstown Motors was previously reported negotiating with the government for financing from the loan program. The startup also recently purchased General Motors closed assembly plant in Lordstown, Ohio.

Loan Program Has Financed Tesla, Ford, And Nissan Since 2009

The loan program started financing the U.S automakers in 2009. A spokesperson for the loan program has not yet commented on Trump’s proposed budget that called it costly and wasteful.

The loan program, as per its website, has lent $465 million to Tesla Inc. in 2010 directed at manufacturing the Model S, $5.9 billion to Ford in 2009 that helped it upgrade 13 of its facilities located in six different states and focused on the production of a range of its vehicles, and $1.45 billion to Nissan Motor in 2010 to support the production of Nissan Leaf (all-electric). The financing to Nissan was also targeted at upgrading its facility located in Tennessee and establishing a new manufacturing plant for advanced batteries.

While Nissan and Tesla have already repaid the loans as of September 2017, Ford is scheduled to repay in September 2022. The program’s website also highlights that the loan was authorized in 2016 to finance $16 billion worth of auto industry’s projects in an attempt to fuel local economies that were expected to translate into global economic competitiveness for the United States.

Trump Had Also Tried To Cut Funding For The Auto Industry In 2019

The recently proposed budget, however, is not Trump’s first attempt to minimize funding sidelined for the auto industry. Trump’s administration had also proposed in 2019 to eliminate $7500 worth of tax credit associated with new electric vehicle purchases. While the government had cited massive savings up to $2.5 billion in a decade, the proposal was never put to implementation following a broad rejection.