3 firms get $8 billion in loans for green vehicles
The Energy Department said Tuesday that it would lend $5.9 billion to Ford Motor Co. and provide about $2.1 billion in loans to Nissan Motor Co. and Tesla Motors Inc., making the three automakers the first beneficiaries of a $25-billion fund to develop fuel-efficient vehicles.
Energy Secretary Steven Chu announced the loan recipients at Ford’s Research and Innovation Center in Dearborn, Mich. The loans to Ford will help the company upgrade factories in five Midwest states to produce 13 fuel-efficient vehicles.
Nissan will receive $1.6 billion to retool its plant in Smyrna, Tenn., to build advanced vehicles and build a battery manufacturing facility. The Japanese company has previously outlined plans to develop an all-electric car with 100 miles of pure battery range for release in late 2010.
Tesla, based in San Carlos, will get $465 million in loans to build electric vehicles and electric drive powertrains in California. It will use $365 million for production engineering and the assembly of the Model S sedan, an all-electric vehicle that is expected to travel up to 300 miles per charge and begin selling in 2011. It will use $100 million for a powertrain manufacturing plant expected to employ 650 workers.
Tesla CEO Elon Musk said the automaker would use the loan “precisely the way that Congress intended -- as the capital needed to build sustainable transport.”
Dozens of auto companies, suppliers and battery makers have sought a total of $38 billion from the loan program, which was created last year to provide low-interest loans to car companies and suppliers to retool their facilities to develop green vehicles and components such as advanced batteries.
The loans were designed to help the automakers meet new fuel-efficiency standards of at least 35 mpg by 2020, a 40% increase over current standards.
Ford had been seeking about $5 billion in loans by 2011 and a total of $11 billion from the program to invest $14 billion in advanced technologies over seven years. The company said it would transform plants in Illinois, Kentucky, Michigan, Missouri and Ohio.
Ford CEO Alan Mulally said the department had approved the company’s entire proposal through the 2011 period and would help Ford meet the new fuel-efficiency standards.
General Motors Corp. and Chrysler Group have received billions of dollars in federal loans to restructure their companies through government-led filings for bankruptcy protection, but Ford avoided seeking emergency aid by mortgaging all of its assets in 2006 to borrow about $25 billion.
Mulally said the loans Ford would receive from the Energy Department were part of a government-industry partnership and “had nothing to do with the emergency loans to keep General Motors and Chrysler in business.”
Ford has said it intends to bring several battery-electric vehicles to market. The automaker has discussed plans to produce a battery-electric van in 2010 for commercial use, a small battery-electric sedan developed with Magna International by 2011 and a plug-in hybrid vehicle by 2012.
GM has requested $10.3 billion in loans from the program, and Chrysler has asked for $6 billion in loans. Energy officials have said the loans could go only to “financially viable” companies, preventing GM and Chrysler from qualifying for the first round of the loans.
