The Obama Administration yesterday announced $8 billion in loans to Ford (NYSE: F), Nissan (7201.T) and Tesla Motors to build and update factories for the production of next-generation, efficient vehicles.
These are the first conditional loan commitments reached as part of the Department of Energy’s Advanced Technology Vehicles Manufacturing program. The Department plans to make additional loans under this program over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.
Ford received the lion’s share of $5.9 billion to transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce 13 more fuel efficient models.
Nissan North America, Inc. received $1.6 billion to retool their Smyrna, Tennessee factory to build advanced electric automobiles and to build an advanced battery manufacturing facility.
Tesla Motors will get $465 million to manufacture electric drive trains and electric vehicles in California.
"We have an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America," President Obama said. "These loans–and the additional support we will provide through the Section 136 program–will create good green jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market."
Ford Motor Company will receive its loan funding through 2011 to help finance numerous engineering advances to traditional internal combustion engines and electrified vehicles. In addition, theses loans will help the company convert two truck plants to the production of cars. Ford plans to raise the fuel efficiency of more than a dozen popular models, including the Focus, Escape, Taurus and F-150, representing close to two million new vehicles annually.
Nissan loans will aid in the construction of a new battery plant and modifications to the existing assembly facility. Nissan aims to manufacture a cost-competitive all-electric car, overcoming a major obstacle to widespread adoption of pure electric vehicles. Nissan will offer electric vehicles to fleet and retail customers, and plans to ramp up production capacity in Smyrna up to 150,000 vehicles annually.
Susan Brennan, vice president in charge of manufacturing at Smyrna, said: "This opens a new chapter in Nissan’s 26-year manufacturing history in America."
The first part of Tesla’s loan will finance a manufacturing facility for the Tesla Model S sedan. Production of the all-electric sedan will begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013.
The second part of the loan will support a facility to manufacture battery packs and electric drive trains to be used in Teslas and in vehicles built by other automakers, including the Smart For Two city car by Daimler. Early pilot battery pack production will begin in 2011, reaching about 10,000 by 2012 and 30,000 packs in 2013.