U.S. lends money for electric cars
DEARBORN, Mich. - The Obama administration said yesterday that it would lend $5.9 billion to Ford Motor Co. and a total of about $2.1 billion to Nissan Motor Co. and Tesla Motors Inc. in a government-industry partnership to build energy-efficient cars.
Energy Secretary Steven Chu said the three automakers would be the first beneficiaries of a $25-billion fund to develop green vehicles. The loans to Ford will help the company upgrade factories in Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 fuel-efficient vehicles.
Nissan will receive loans of $1.6 billion to retool its plant in Smyrna, Tenn., to build electric vehicles and construct a battery manufacturing plant. Tesla will get $465 million in loans to build electric vehicles and electric-drive powertrains in California.
The loans are designed to help auto manufacturers meet new fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40 percent increase over current standards.
Dozens of auto companies, suppliers and battery makers have requested $38 billion from the loan program, which was created last year to give car companies and suppliers low-interest loans to retool their facilities for green vehicles and components such as advanced batteries.
Ford had been seeking about $5 billion in loans by 2011 and a total of $11 billion from the program. Adding its own funds, the company wants to invest $14 billion in advanced technologies during the next seven years.
Ford expects to begin repaying the loans in 2012, with an interest rate based on the current U.S. Treasury rate hovering between 3 percent and 4 percent, said Ford spokesman Mike Moran. The company would have faced much higher interest rates from private lenders.
Nissan said it would use its $1.6 billion loan to modify its Tennessee plant to produce zero-emissions vehicles and build a new facility to produce lithium-ion battery packs.
Tesla, of San Carlos, Calif., 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 go on sale in 2011. It will use $100 million for a powertrain manufacturing plant expected to employ 650 workers.