Three more car companies received sizeable loans from the federal government yesterday, but don’t worry; it’s not another bailout. In fact, the$8 billion is just the start of a larger $25 billion project called the Advanced Technology Vehicles Manufacturing Loan Program (ATVM for short) that was thought up back in 2007 and funded by Congress in late 2008 during the Bush administration.
The project, overseen by the Department of Energy, is a federal grant and loan initiative bent on providing low interest capital to automobile manufacturers — as well as the makers of their component parts — to promote the development of new automobile technologies that guzzle less gas — and in some cases, no gas at all.
U.S. DOE Secretary Steven Chu, sharing the stage with President Obama to announce the first round of loans, received a standing ovation from employees of the Ford Motor Co. when he explained that Ford would receive $5.9 billion from the program. By far the largest beneficiary of the three companies named, Ford hopes to have their first check by late July and has grand plans for the cash. They will use the money to overhaul factories to produce 13 greener cars in Illinois, Kentucky, Michigan, Missouri, and Ohio as well as for R&D funding to increase the fuel efficiency of several existing brands, including the Taurus and F-150.
Nissan, a Japanese carmaker with growing manufacturing interests in North America, will use their $1.6 billion to remodel and expand their facilities in Smyrna, Tennessee. By 2012, the plant should be churning out 150,000 fully electric, zero-emissions vehicles and 200,000 lithium ion batteries each year. Nissan claims their new electric vehicle will seat five and have a range of 100 miles between charges.
Receiving the least amount of money of the three is the privately held Tesla Motors. Still, $465 million is hardly trivial, especially when you consider what Tesla intends to do with it. A portion, $100 million, will build a facility to manufacture battery packs and drivetrains; Tesla intends to use these components both for their own cars and other companies’ that they’re hoping to sell to in the near future. The rest will refurbish an old factory — which Tesla is currently in talks to buy — to produce their new Model S sedan, introduced by the company in March.
This latest announcement is just the most recent sign that Tesla is around to stay. In May, Daimler bought 10% of Tesla and a seat on its board, vastly increasing the startup’s access to established engineering know-how — not to mention an international supply chain. Earlier this month, with much pomp and circumstance, Tesla delivered its 500th Roadster, the all-electric sports car that can go 244 miles in a single charge with absolutely no emissions. They recently opened several new showrooms in the U.S., and their first international showroom is set to open in London on Friday. And Tesla has already received over 1,200 deposits for their new Model S — which won’t even be produced until 2011.
At the announcement at the Ford plant in Detroit, President Obama stressed that the loans from this program would help companies involved at all levels of automobile manufacturing meet the fuel economy standards his administration announced earlier this year “while helping [America] to regain [its] competitive edge in the world market.” Secretary Chu reiterated, “By supporting key technologies and sound business plans, we can jumpstart the production of fuel efficient vehicles in America. These investments will come back to our country many times over — by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions.”
Well, here’s hoping.
Photo Credit: dpstylesTM at flickr