Ford Motor Company will accept $5.9 billion in loans as part of an Energy Department program to spur development of fuel efficient vehicles. Nissan will also receive $1.6 billion, and Tesla will take $465 million.
After previously refusing to take government bailout money, Ford Motor Company will now accept a different $5.9 billion loan from the U.S. government. Ford intends to use the money to increase their vehicle's fuel economy across a variety of vehicles, including an all-electric Ford Focus.
Ford has previously stated interest in a Focus EV. The next generation Focus platform should come out in 2010, with the electrified model hitting dealerships about two years later. Ford is also said to be working on an all-electric commercial van for 2010, and a plug-in Ford Escape Hybrid for 2011.
For Ford, the loans could put them at a significant advantage over Chrysler and General Motors. While the other two companies spend efforts trying to fix their corporations, Ford will be able to continue pressing ahead with new developments. This infusion of cash will go towards new direct-injection petrol engines, and the creation of electric vehicles. Ford also plans to modify two truck factories into plants for the Ford Focus.
The loan is not a part of the Troubled Assets Relief Program, instead approved as part of a two-year old energy bill. Passed by lawmakers and signed by former President George W. Bush, the $25 billion provides access to capital for both American and foreign automakers looking to develop more fuel efficient vehicles.
Another automaker taking the States up on its offer is Nissan, who will use $1.6 billion to develop electric vehicles. Nissan is ramping up capacity at their Smyrna, Tennessee, manufacturing facility. They hope the location will be able to produce up to 150,000 electric vehicles.
Meanwhile, California-based Tesla is borrowing $465 million to engineer their upcoming all-electric sedan. Tesla plans to price the sedan under $55,000, provided they can efficiently produce electric transmissions and battery packs. Recent reports suggest the firm will build the Model S sedan in southern California.
Companies producing autos in the United States will have to comply with new federal mandates requiring fleets to maintain a 35 mpg. The rules will go into effect in 2016.
More than 100 applications for aid have been sent to the Energy Department. Loan repayment will begin in 2012.