Federal Government Provides $8 Billion in Green Vehicle Loans to Automakers

July 2nd, 2009 BY njkaters | 1 Comment

Congress tasked the Department of Energy last fall with helping automakers move away from traditional vehicles to eco-friendly models with the Advanced Technology Vehicles Manufacturing Loan Program. The Department received applications from OEMs, automakers and other companies hoping to lead America’s next generation of automobiles. President Obama announced the initial round of recipients for the program’s conditional loans last week with $8 billion loaned from the allocated $25 billion. The winners in this initial round of loans included Ford, Nissan and Tesla while General Motors and Chrysler were disqualified due to their lack of financial viability.

Ford Motor Company received $5.9 billion in conditional loans from the Department of Energy to start development on 13 fuel-efficient vehicles. The loans will be distributed through 2011 and help the American automaker fund its Transit Connect project in 2010 and EV project with Magna Steyr in 2011. Ford will be producing these vehicles at retrofitted American auto plants in Dearborn, Cleveland, Louisville, Kansas City, Chicago and other industrial cities on the decline. A portion of the federal government loans to Ford will be used to provide training on green vehicle engineering, construction and troubleshooting to hundreds of current workers.

Nissan was given $1.6 billion in federal loans to convert its Smyrna, Tennessee plant for electric vehicle production. The plant will be used to produce electric vehicle models as well as lithium ion batteries starting in 2012. Nissan has set goals of 150,000 electric vehicles and 200,000 lithium ion packs per year once the Smyrna plant has been completely refitted. The automaker has noted that the EV production plant that emerges in Smyrna may require 1,300 more workers, thereby creating jobs in a floundering auto market.

Tesla Motor Company received a $465 million loan from the Department of Energy to fund production of its Model S sedan. The company will use the loan to create a new plant for the Model S that will also be used to produce components, battery packs and drive trains. Tesla’s Model S project is projected to create 1,000 production jobs, a boon to struggling blue-collar workers in California. These workers will produce the first Model S by 2011 with production goals of 10,000 units in 2012 and 30,000 units in 2013.