No bank would touch Elon Musk’s electric car dreams, but the U.S. government did. Today, Musk is killing the program that saved him.
Once upon a time, when Elon Musk’s bank account was a “mere” billion dollars deep, he still needed a lifeline. In January 2010, it was the U.S. Department of Energy’s Loan Programs Office (LPO) that stepped up, floating Tesla $465 million to secure the Fremont factory, build battery and car production lines, and get Project WhiteStar, later known as the Model S, into motion.
Burning the Bridge Behind Him: Musk and DOGE Gut the DOE
Fast-forward fifteen years, and Musk is busy gutting the very program that helped make him the richest man on Earth. Under the Trump-era Department of Government Efficiency (DOGE), Musk’s handpicked wrecking crew launched what Latitude Media calls a “demoralizing” and “hostile takeover” of the Department of Energy, operating with the charming motto: “keep cutting ’til the screaming starts.” Over 1,200 DOE employees have already been shown the door, and earlier this month, the Loan Programs Office, one of the Department’s most effective branches, was decimated by a 60% staffing cut. Worse still, more layoffs are coming.
It’s almost laughable to think any private bank would have given Musk half a billion dollars for an unproven electric car company in a market that barely existed. But that’s exactly why the Loan Programs Office was created, to take big swings on big ideas that the private sector is too shortsighted or too gutless to back. Not only has the LPO proven it can spark innovation, it actually generates income for the Department of Energy. So why is DOGE gleefully taking a sledgehammer to it?
A letter sent to Energy Secretary Chris Wright, signed by dozens of energy industry leaders including the American Nuclear Society, spells it out: “The office’s ability to underwrite and monitor large-scale energy projects depends on specialized technical staff and institutional capacity. Without them, the federal government risks slowing or stalling the diverse mix of energy projects that serve national priorities, such as new nuclear energy development for powering AI data centers, undermining investment certainty and weakening American competitiveness.”
Killing Innovation: DOE Cuts Freeze Clean Energy Projects Nationwide
And the damage is already stacking up fast. According to Latitude Media, even the brief “stop work” order from DOGE has frozen critical loans and sent major projects crashing down. Battery manufacturers Kore Power and Freyr Battery canceled factory plans in Arizona and Georgia, respectively. Aspen Aerogels shelved a plant that would have built thermal barriers for EV batteries in Georgia. Pacific Gas and Electric (PG&E) says its $15 billion DOE loan for critical infrastructure upgrades is now under “substantial uncertainty”, and, naturally, customers will pay the price.
Killing the LPO isn’t just a short-term disaster. It’s a direct assault on America’s clean energy future and the U.S. electric vehicle industry itself. Startups like Rivian and Lucid exist today because of the LPO’s early bets. Hell, the existence of any alternative fuel vehicle market in the U.S. owes a huge debt to this program.
There’s no sugarcoating it: sabotaging the LPO may be the dumbest and most self-destructive move Musk and DOGE have pulled off yet. And America will be paying for their shortsightedness for decades.