The US Department of Energy has been sued in US court by a company that it denied a loan to in its Advanced Technology Vehicles Manufacturing program. San Francisco-based XP Technology is charging the DOE with "corruption and negligence" for the way it handled the approval for loan process.

XP Technology is looking for funding to develop its battery and hydrogen fuel-cell powered car that has body panels made from expanded foam. The compact car would weight around 1,500 pounds, less than half the weight of similarly sized electric vehicles such as the Nissan Leaf. It's powered by small, removable cartridges that can be quickly swapped by owners or recharged at home. XP Technology has been granted several patents covering the technology inside the vehicle, but it's yet to build the car.

This is the fourth time the company has been turned down for DOE loans through the ATVM program. Two of the loan applications were for $25 million and two were for $45 million; two other applications are still pending. The company says that it was previously given a $1 million grant from a previous DOE program to help develop a hydrogen storage system used in its vehicle.

So far, funds from the $25 billion ATVM program have only gone to Ford, Nissan, Tesla and Fisker. XP is alleging that other startup electric vehicle makers such as Bright Automotive and Aptera Motors had their application reviews intentionally stalled to force them out of business and protect favored players. Bright Automotive and Aptera Motors have both filed for bankruptcy. Published reports are also cited in the lawsuit criticizing other DOE loans including the now-bankrupt solar energy company Solyndra. XP is soliciting other companies to join it in the lawsuit. In 2009, when the first DOE loan was rejected, XP was looking for support from the public.

XP's latest complaint was filed recently with the US Court of Federal Claims, and was denied. The company plans to have it re-filed through an attorney, and the suit will seek an injunction freezing all DOE loans programs until a new approval system has been established.