DOE Gives $8 Billion in Green Car Funding to Ford, Nissan and Tesla
The Department of Energy today confirmed that the initial round of low-cost loans to support development of new strains of greener, more fuel-efficient vehicles will be going to Ford, Nissan and Tesla. The announcement, made at Ford Motor Company headquarters in Dearborn by Energy Secretary Steven Chu, will see the three automakers split about $8 billion of the $25 billion total set aside by congress for this purpose under provisions of the Advanced Technology Vehicles Manufacturing Loan Program (ATVMLP) approved last fall.
Ford is set to receive the lion's share of this financial support, with its $5.9 billion cut earmarked to cover updating and retrofitting existing plants in Illinois, Kentucky, Michigan, Missouri and Ohio that will turn out 13 new high-efficiency models. Ford CEO Alan Mulally said the company also plans to invest an additional $14 billion over the next seven years in advanced vehicle technology that will help ensure it a leadership position in fuel economy.
Nissan received conditional approval for $1.6 billion in ATVMLP loans which it confirmed will go towards expanding and transforming the Smyrna, Tennessee, assembly facility into a source point for both its upcoming zero-emissions electric vehicles and the Lithium-ion battery packs they'll require. New construction is slated to start by the end of this year and the first production Nissan EVs are expected to roll off a dedicated line there by the end of 2012.
Silicon Valley startup electric vehicle (EV) firm Tesla Motors was the final manufacturer to receive ATVMLP support. Tesla says $365 million of the $465 million loan package it was awarded will go to cover production engineering and assembly costs for its upcoming Model S, a new and more affordable ($57,400) EV sedan that can travel 300 miles on a single charge and is expected to hit the market sometime in later 2011. The remaining $100 million will be used to create a facility that will build electric powertrains, for Tesla as well as for other commercial clients.
Both General Motors and Chrysler also applied for a portion of these ATVMLP development loans but neither automaker was approved due to their currently uncertain financial situations. The Obama administration has indicated that it plans to award additional ATVMLP funding during the coming months. To qualify, an automaker must manufacture vehicles and/or vehicle components in the U.S. that will increase fuel economy levels by at least 25 percent above its 2005 index numbers.