Lordstown Motors Considers Department of Energy Loan
YOUNGSTOWN, Ohio – Lordstown Motors Corp. said Wednesday it is exploring a U.S. Department of Energy loan program targeted at encouraging the development of high-efficiency vehicles.
The company, which purchased the former General Motors Lordstown Complex that GM idled last year, is “in discussions with government leaders” about potentially utilizing the Advanced Technology Vehicles Manufacturing loan program.
“We are currently in the process of learning more about the loan and the application process, which is a pretty comprehensive one,” a company spokesman said Wednesday afternoon.
The spokesman did not state how much it might request under the program as part of its efforts to raise the more than $300 million it is seeking to fund startup operations at the plant.
Lordstown Motors declined to comment further on its efforts to raise funds. In December, an investment banker working with the company said he was seeing strong interest from global investors but acknowledged late in the year wasn’t the “optimal” time of the year to raise startup capital.
Since it was created in 2007 and authorized to loan $17.7 billion, the Advanced Technology Vehicles Manufacturing Loan Program has awarded $8 billion for projects that supported the production of more than 4 million advanced technology vehicles, according to its website.
Ford Motor Company received a $5.9 billion direct loan in September 2009 to upgrade 13 facilities in six states. Nissan North America was loaned $1.45 billion in January 2010 to build a battery manufacturing plant and upgrade a plant, both projects in Tennessee, to manufacture the LEAF. Also in January 2010, Tesla Motors received a $465 million loan to bring the first zero-gas, full-size electric vehicle to market.
Nissan and Tesla have both repaid their loans, the website states.
Lordstown Motors said in November that it would begin manufacturing the Endurance, an electric pickup truck, in November 2020.
U.S. Rep. Tim Ryan said Wednesday that he led a group of 10 members of the Ohio congressional delegation who sent a letter to the U.S. Department of Energy to support an application from Lordstown Motors for the loan.
Among those who joined Ryan, D-13 Ohio, in the letter to Energy Secretary Dan Brouillette, were U.S. Rep. Bill Johnson, R-6 Ohio, and U.S. Sens. Sherrod Brown, a Democrat, and Rob Portman, a Republican.
“Lordstown Motors’ proposal to convert the former GM assembly plant into a state-of-the-art electric vehicle manufacturing facility is an excellent example of why Congress created this particular loan program,” Ryan said in a statement issued by his office. “Not only will this funding jumpstart our local economy now, but it will position Youngstown and the Mahoning Valley as a leader in the economy of the future.”
Plant officials estimate they will hire as many as 400 workers in 2020 to manufacture the electric-powered pickup trucks. For each automotive manufacturing job, it is estimated that up to eight ancillary or related supplier or support jobs will also be created.
Read the Full Letter below:
Dear Secretary Brouillette,
We are writing to lend our strong support to Lordstown Motors Corp’s (LMC) application for a loan through the Advanced Technology Vehicles Manufacturing (ATVM) direct loan program. We believe the ATVM Loan Program plays a crucial role in supporting the nation’s growth of the U.S. auto manufacturing industry and affords companies the necessary capital for large-scale retooling projects like this. Assistance from the federal government would leverage private sector financing for investment in LMC’s plant to build electric vehicles in Lordstown, Ohio, and grow the region into the epicenter of electric vehicle manufacturing in the Midwest.
Northeast Ohio saw its economy suffer when General Motors announced in October that it was permanently closing its Lordstown Assembly Plant. As a result, thousands of workers were forced to move, retire, or obtain other jobs, dealing a severe blow to the regional economy. Thankfully, Lordstown Motors announced in November that it had purchased the Lordstown Assembly Plant from GM and would initially hire as many as 400 workers in 2020 to manufacture electric-powered pickup trucks. It is estimated that for each automotive manufacturing job creates up to eight ancillary or related supplier or support jobs. As Ohio Senators and Representatives, it is a high priority to support Lordstown Motors’ business so that it will be successful and provide high-paying job opportunities in the region.
As you know, the auto industry is capital-intensive and constitutes one of the most important market sectors nationwide – historically contributing 3 to 3.5 percent to the overall Gross Domestic Product (GDP). The Electric Vehicles Market (EVM) is expected to exceed more than $151.5 billion by 2024 with approximately 7 percent of the 250+ million vehicles (cars and light trucks) expected to be on U.S. roads in 2030. Needless to say, working to ensure that Ohio is at the forefront of EVM is of great importance to all of us.
We believe that Lordstown Motors’ proposal to convert General Motors’ Lordstown Assembly Plant into a state-of-the-art electric vehicle manufacturing facility is an excellent example of why Congress created the Advanced Technology Vehicles Manufacturing loan program. In our opinion, this project is the perfect fit for the ATVM program, and we urge you to give Lordstown Motors’ application your fullest consideration.
Sincerely,
Sherrod Brown
United States Senate
Rob Portman
United States Senate
Tim Ryan
Member of Congress
Bill Johnson
Member of Congress
David P. Joyce
Member of Congress
Marcia L. Fudge
Member of Congress
Anthony Gonzalez
Member of Congress
Marcy Kaptur
Member of Congress
Brad R. Wenstrup, D.P.M.
Member of Congress
Bob Gibbs
Member of Congress
Copyright 2024 The Business Journal, Youngstown, Ohio.
