The dream of a purpose-built, fuel-efficient police car may be in jeopardy. The Energy Department has denied the application of an Indiana start-up for a $310 million loan that would have created its advanced police car.

Carbon Motors is pushing a police pursuit car it calls the E7. It says it has over 20,000 reservations from more than 500 law enforcement agencies in all 50 U.S. states, in addition to interest overseas. It says the car's creation would have resulted in 1,550 direct jobs.

Carbon has been waiting for years for the loan under the same program that provoked the outcry about the loan to solar-panel provider Solyndra. That company's financial problems provoked a Republican outcry about wasteful spending by the Obama administration.

A n "outraged" Carbon, in a statement, blames DOE for bowing to election-year political pressure in not granting the loan.

"It is clear that this was a political decision in a highly charged, election-year environment," said William Santana Li, chairman and chief executive officer, Carbon Motors. "Carbon Motors simply appears to be the last victim of this political gamesmanship."

Other start-ups that were waiting for DOE loans have also failed. Bright Automotive, which was going to make a fuel-efficient van, just announced it can no longer stay in business without the loan. Aptera, a Southern California-based start-up, failed earlier this year and won't make its unusual pod-like electric car.

Carbon started with good timing. When it applied for its loan, most police agencies depended on Ford's aging Crown Victoria as their standard car. It had little competition. But with the Crown Vic now gone, Ford, Chrysler and General Motors have all stepped up with replacements, making the competition suddenly pretty hot. And the new cars have some of the unique features that Carbon had been promoting for officer comfort, convenience and safety that are unique to police work.

Carbon was going to power its car with a BMW diesel engine to be fuel efficient. But the Detroit Three are making strides there as well, with Ford, for instance, offering turbo-charged engines in its new Taurus-based police car to save gas.

Mostly, it sounds like Carbon, based in Connorsville, Ind., resents being put through so many hoops for no result.

"We spent over 30 months responding to every request made of us by the DOE – many of which were at best challenging and at worst, unnatural," said Li. "During the past year we were in almost daily contact with the DOE staff and were neither advised that our application was coming up short in any way, nor told that there was anything we would need to do in order to finalize the loan that we did not satisfy."