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No way to measure total private investment

By J.B. Wogan August 31, 2012

In other Obameter items, we've tracked the federal government's progress helping car makers build fuel-efficient vehicles. As a candidate, Barack Obama promised to provide loan guarantees and tax credits to the industry. He also promised to invest in all-electric and plug-in hybrids, both by purchasing them as federal vehicles and by handing consumers tax credits.

What is harder to evaluate is an Obama campaign promise to leverage those efforts for additional private investment, to the tune of $50 billion. Last time we assessed this promise, we mistakenly said Obama promised that amount in public dollars. A closer reading of the exact language shows he was saying he would try to spur $50 billion in investment from auto manufacturers.

Unfortunately, no one aggregates this kind of information, so far as we can tell. As we noted in a previous post, the administration has loaned $8.4 billion to auto companies such as Nissan North America and Ford Motor Company. The loans help finance the production of vans that run on compressed natural gas, electric-vehicle battery packs, electric motors, and two types of plug-in hybrids.

In 2007 Congress set aside $25 billion for this program, though the Energy Department did not award any loans until 2009, under the Obama administration. The Energy Department indicates that at least two of the program's loan recipients -- Tesla and Fisker Automotive -- raised slightly more than 100 percent of their loans' worth in private investment, about $1.3 billion in total.

We also noted that the American Recovery and Reinvestment Act, better known as the economic stimulus, gave $2.3 billion in tax credits for investment in advanced energy manufacturing. Though not specific to manufacturers of cars and their parts, the government has assigned that money for 183 projects, with recipients including the American branches of Volkswagen, Honda and Mitsubishi, as well as lesser-known fuel-cell manufacturers, biofuel facilities and electric-vehicle auto plants. Again, we cannot quantify how much, if any, the private investment occurred because of these tax credits.

The other difficulty in evaluating this promise is the question of a causal effect: Would the company have invested in fuel-efficient manufacturing even without the loan or tax credit? Since not enough evidence is available, we will leave this as In the Works. If we learn of anything that would nudge this to Broken or Kept on the Obameter, we'll revisit the promise.

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