US to loan $5.9 bln to Ford, $1.6 bln to Nissan, $465mln to Telsa
As reported earlier today on doubleclutch.ca
The US government confirmed that it 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. 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 revolutionize 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.”
U.S. President Barack Obama called the loans “an historic opportunity.”
“These loans … will create good 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,” Obama said in the statement.
The DOE estimated the grants, provided through the Advanced Technology Vehicles Manufacturing Loan Program, would reduce U.S. gasoline consumption by 140 billion gallons a year.
Interesting findings from a recent study, summarized in the AFP coverage of the story:
“A study published Monday found that even tighter fuel efficiency rules could help boost the profits of General Motors, Ford and Chrysler by three billion dollars a year.
The University of Michigan study found that the Detroit Three have vastly underestimated the American public’s willingness to pay a premium for fuel-efficient vehicles.
The study found that an industry-wide mandated increase in fuel economy of 30 percent to 50 percent – from roughly 35 to 40.4 miles per gallon – would boost demand by enough to occupy two additional large assembly plans.”
Ford will receive $5.9 billion US to retool factories in Michigan, Ohio, Illinois, Kentucky and Missouri in order to produce 13 models.
Nissan’s North American unit will receive $1.6 billion US to retool its Smyrna, Tenn., facility to build electric cars and an advanced battery manufacturing plant.
Start-up Tesla Motors Inc will receive $465 million US to build electric drive trains and electric vehicles in California, Energy Secretary Steven Chu said at Ford headquarters in Dearborn.