The US government will loan 5.9 billion dollars to Ford Motor Co and 1.6 billion dollars to Japanese automaker Nissan to invest in improving the fuel economy of their US-built vehicles, officials said Tuesday. The loans are the first awarded out of a 25-billion-dollar program to help automakers meet upcoming fuel efficiency standards, Energy Secretary Steven Chu said at a press conference.
"I'm pleased to announce eight billion in provisional loan agreements that will drive innovation in fuel efficiency and help revolutionise the automobile industry in America," Chu said. "These loans will help the auto industry meet and even exceed the president's tough new fuel standards while creating jobs, reducing our dependency on foreign oil and ensuring America's competitiveness."
Another 465 million dollars will be loaned to electric sports car maker Telsa. Additional loans will be awarded to "large and small automobile manufacturers and parts suppliers up and down the production chain" over the coming months, said Chu, who vowed to release the funds as quickly as possible.
"The Ford Motor Co, an American icon will be awarded 5.9 billion dollars in loans so the American workers can raise the efficiency of more than a dozen popular models," Chu said. The loan will help Ford raise the efficiency of close to two million new vehicles annually. The department of energy estimates these upgrades will lead to fuel savings of more than 20 million gallons a year.
That would produce a savings of more than half a billion dollars a year for US drivers at current fuel prices, Chu said. The loans will allow Ford to update factories in five US states and "transform more than 35,000 jobs into green engineering and manufacturing jobs," Chu said. Nissan will use the loans to modify its Tennessee plant to produce zero-emissions electric vehicles and the lithium-ion battery packs to power them.
With this loan, "Nissan expects to cut the costs of its batteries in half and ramp up production of 150,000 American-made competitively priced electric vehicles annually," Chu said. Ford chief executive officer Alan Mulally embraced the "historic green partnership" and said the automaker was committed to invest nearly 14 billion dollars in advanced technology vehicles in the next seven years. Nissan welcomed the loan and said it is "committed to being a leader in zero-emissions mobility."
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