Since the multi-billion dollar auto bailout during the 2008-2009, the U.S. government is continuing to provide incentives for auto manufactures to make more fuel efficient vehicles. The U.S. regulations require cars to deliver 54.5 miles per gallon by 2025. The Federal government’s incentives to car makers totaled $8.4 billion to date. Incentives come in with a very low interest loan around one percent from the U.S. Treasury Department’s bank known as the Federal Financing Bank under a program called Advanced Technology Vehicle Manufacturing. Loans have been guaranteed by the U.S. Department of Energy.
Under the incentive program Ford Motor has taken $5.9 billion to upgrade auto plants throughout the United States; $1.4 billion by the Nissan Motor to retool a factory in Tennessee; $529 million by Fisker Automotive who makes a luxury plug-in; $465 million by Tesla Motor to also develop a plug-in; and others have taken advantage. An additional $50 million has been awarded to a company to develop a gas-powered vehicle.
The critics say incentives to car buyers such as the $7,500 credit for hybrids and plug-ins would have produced more benefits rather than incentivizing the manufacturers. Another incentive that worked in the past is the cash for Clunkers program.