Electric car designers suing DOE over loan denials, intellectual property disclosure

  • XP Vehicles

     (XP Vehicles)

  • XP Vehicles

     (XP Vehicles)

They claim the federal government wanted to kill their project, and now the folks behind a radical electric car proposal are trying to strengthen their case against the Department of Energy.

California-based XP Vehicles, which cites Kelly Clarkson's hit tune “Stronger” as its unofficial theme song, and alternative energy company Limnia are jointly suing the government agency and two of its officials, alleging it denied them $55 million in technology loans in favor of giving billions to companies with political ties to the Obama administration, including Tesla and Fisker.

XP Vehicles and Limnia attempted to file a similar lawsuit in Federal Court of Claims in November, but it was rejected because they did not have legal representation at the time. Now, the companies have teamed up with Cause of Action, a self-proclaimed nonpartisan government watchdog group often linked to conservative issues.

Cause of Action Executive Director Dan Epstein said his organization became involved in an effort to expose what his clients allege is rampant cronyism in the loan approval process for the Energy Department’s $25 billion Advanced Technology Vehicle Manufacturing (ATVM) program, which was created to support the development of fuel efficient automobiles.

To this end, the would-be automakers designed a radical, lightweight, energy-efficient vehicle that uses bodywork constructed from a foam-filled, flexible material instead of metal, and runs on electricity provided by a system of exchangeable battery cartridges or hydrogen fuel cells.

The lawsuits, one filed in the Federal Court of Claims against the Department of Energy and the other filed in the U.S. District Court for the District of Columbia against the department as well as Energy Secretary Steven Chu and ATVP administrator Lachlan Seward, seek $450 million in damages from the Energy Department and $225 million from Secretary Chu and Seward, along with a declaration that the plaintiffs loans were unlawfully denied and an official re-review of their applications.

“While the Department does not comment on pending or potential litigation, multiple investigations spanning almost two years and involving millions of pages of documents show that decisions made on the Department’s loan program were made solely on the merits after careful review by the Departments technical experts,” said Energy Department Spokesperson Damien LaVera in a statement to

Epstein says his goal is not just getting compensation for his client, but also laws on the books to put a check on the governments “unbridled authority in picking of winners and losers.”

Along with the issues surrounding the rejected loans, the lawsuits also claim that the Energy Department, through its Sandia National Laboratories, shared Limnia’s secret designs for a hydrogen-fueled power system with both Ford and General Motors, then encouraged the company to seek a partnership with GM so that there would “there was no acrimony.”

Ford received a $5.9 billion dollar loan from the ATVM program to improve the fuel efficiency of its vehicles, while General Motors was famously bailed out by the federal government to the tune of nearly $50 billion.

Both automakers have so far refused to comment on the lawsuit.