Fuel-efficient vehicles get jolt from U.S. government

DEARBORN, Mich. (AP) — Cultivating the next generation of fuel-efficient vehicles, the Obama administration said Tuesday it would lend $5.9 billion to Ford Motor Co. and about $2.1 billion to Nissan Motor Co. and Tesla Motors Inc. in a government-industry partnership to build green cars.

Energy Secretary Steven Chu said the three automakers would be the first beneficiaries of a $25 billion fund to develop fuel-efficient 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 were designed to help auto manufacturers meet new fuel-efficiency standards of at least 35 mpg by 2020, a 40 percent increase over current standards.

“These loans will help the auto industry meet and even exceed the president’s tough fuel standards,” Chu said at Ford’s Research and Innovation Center. “This means the most fuel-efficient cars in the world must be made right here in America.”

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 to invest $14 billion in advanced technologies over the next seven years.

The loans will help Ford convert two truck plants to produce cars and help the company raise the fuel efficiency of nearly 2 million new vehicles a year. The government said it will help Ford transform nearly 35,000 jobs into “green” engineering and manufacturing jobs.

Ford has said it intends to bring several battery-electric vehicles to market starting next year, with a plug-in hybrid vehicle coming by 2012.

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.