It's Official: Ford, Nissan and Tesla To Receive First Advanced-Technology Loans
Yesterday we reported
that Nissan, Ford and Tesla will be the first auto companies to receive factory retooling loans under the $25 billion federal program to speed production of fuel-efficient vehicles in the U.S.
Today, President Obama and Energy Secretary Steven Chu confirmed that the administration has granted $8 billion in conditional loan commitments to the three automakers for the development of vehicle technologies that, as the president put it, "will create thousands of green jobs while helping reduce the nation's dangerous dependence on foreign oil."
The loan commitments include $5.9 billion for Ford to transform factories across Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 more fuel-efficient models; $1.6 billion to Nissan to retool its Smyrna, Tennessee, factory to build electric automobiles and an advanced-battery manufacturing facility; and $465 million to Tesla to manufacture electric drivetrains and EVs in California.
The loans represent the first in a series of conditional loan commitments reached as part of the Energy Department's Advanced Technology Vehicles Manufacturing program. Chu said the department plans to make additional loans under this program over the next several months to large and small automakers as well as parts suppliers.
In a statement, Ford said it plans to invest nearly $14 billion in advanced-technology vehicles over the next seven years. "Our partnership with the Department of Energy also will help retool our U.S. plants more quickly to produce fuel-efficient vehicles and help meet the new, rigorous fuel-economy requirements," it said.
In its statement, Nissan said construction at Smyrna was scheduled to begin by the end of this year, with production slated to start in late 2012. It said modifications at the plant include a new battery-production facility and changes in the existing structure for electric-vehicle assembly.
"When fully operational, the vehicle assembly plant will have the capacity to build 150,000 zero-emissions vehicles a year and the new plant will have an annual capacity of 200,000 batteries," it said, adding that Nissan's EV "will comfortably seat five people, drive on any American road or highway, and have an initial range of 100 miles before recharging."
Model S News
And Tesla said it will use $365 million of the $465 million it received for production engineering and assembly of the Model S, an all-electric family sedan that will supposedly carry seven people and travel up to 300 miles per charge.
The Model S has an anticipated base price of $49,900 after a $7,500 U.S. federal tax credit. According to Tesla, it will have lifetime ownership costs equivalent to a conventional car with a sticker price of $35,000, thanks to the lower cost of electricity versus gasoline and a relative lack of service and maintenance.
Tesla said it expects to start Model S production in late 2011 in a state-of-the-art assembly plant employing about 1,000 workers.
As for the $100 million for a powertrain manufacturing plant, Tesla said the facility will supply all-electric powertrains to other automakers and will employ about 650 people.
The automaker said it is in the final stages of negotiation for facilities in California.
General Motors and Chrysler
Created in 2007 and appropriated in September 2008, the $25 billion Advanced Technology Vehicles Manufacturing program aims to reduce America's dependence on foreign oil and create green-collar jobs. It is entirely unrelated to the stimulus package - or the so-called "bailout" funds - that General Motors and Chrysler have received.
However, Chu said today that the administration began talks with Chrysler on possible energy technology loans immediately after the company stepped out of bankruptcy protection this month. It is also having "technical" discussions with General Motors, which is currently reorganizing in bankruptcy proceedings.
Both companies applied for financing last year but their financial distress disqualified them from consideration in the first round of financing. The $25 billion program is only open to viable companies.
Scott Doggett, Contributor
- Posted by
- Scott Doggett June 23, 2009, 10:29 AM
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- Batteries, Emissions, Ford, Fuel Economy, Legislation, Nissan, Plug-ins and Electric, Tax Incentives, Tesla
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- Advanced Technology Vehicles Manufacturing, Automakers, Chu, Energy Department, Ford Motor Co, Fuel Efficient, Legislation, Nissan Motor Co., Obama, Plug In Electric Vehicles, Tesla Model S
Taxpayers do not have unlimited funds -- but the government continues to spend money like it's their own pocket book.
When capitalism's business cycle veers into discomfort (unemployment, slowing sales and borrowing, etc.) -- the State (government) now suppresses recession with monetary policy (making money cheap and abundant) and fiscal policy (quantitative easing, injections of liquidity, stimulus programs, etc.) so nobody feels pain. But the problems are still there, just hidden for a time by the bailouts. They will continue to grow until another bailout is needed (e.g. Chrysler).
Capitalists and those that embrace the free market reject this narrow notion for many reasons. Chief among them is that fact that experience and progress is the byproduct as we surmount difficulty. The Marines say, pain is weakness leaving the body. These downturns are inefficiencies leaving the system. These loans will be used to prop up inefficient systems. Nobody truly learns. Nobody truly grows. Nobody progresses.
--
Stop the paronioa: You do not need to boycott car manufactures that accept bailouts. Capitalism thrives when you make a decision that fits you. You should find the car that you want -- and that meet the criteria important to you. Car manufacturers that accept bailout money will be required to add inefficiencies to their business model and are at a disadvantage to produce the car that meets your needs the best. You should make car manufacturers and dealers compete for your business.
So if you are thinking about a car, check out this process on this blog: http://excarsalesman.typepad.com/
Sincerely,
Ford Fan