Washington, D.C. – Ford will receive a US$5.9 billion loan from the U.S. Department of Energy (DOE) to transform factories in five states to produce more fuel-efficient vehicles, the first of a series of government loans to various automobile and parts manufacturers. The loan is part of the DOE’s Advanced Technology Vehicles Manufacturing program, which supports the development of innovative and advanced vehicle technologies that create clean-energy jobs and reduce dependence on foreign oil.
The loan, which will be used for factories in Illinois, Kentucky, Michigan, Missouri and Ohio, is the first to be finalized since the program was appropriated in the fall of 2008.
“This investment is part of our commitment to creating the clean energy jobs of the future while supporting American innovation,” said Energy Secretary Steven Chu. “We can revitalize the American auto industry and at the same time reduce our dependence on oil and cut our carbon pollution.”
In June, the DOE issued a conditional loan commitment to Ford to finance up to 80 per cent of qualified expenditures to improve the efficiency of light vehicles, using technologies such as engine and transmission improvements, vehicle weight reduction, more aerodynamic designs, and the development of hybrid and plug-in electric vehicles. The funding will help Ford to raise the fuel efficiency of more than a dozen popular models, representing close to two million vehicles annually.
The DOE also announced a total of $8 billion in conditional loan offers to Tesla Motors and Nissan in June, and plans to make additional loans under the program over the next several months to large and small auto manufacturers and parts suppliers. The Ford loan is the first of the conditional offers to be closed.
Applications for the program have included electric and biofuel-fuelled vehicles, and advanced combustion engines, submitted by both car and component makers, U.S. automakers, U.S. manufacturing subsidiaries of foreign-based companies, major U.S. auto parts suppliers, and innovative start-ups. The review process is not focused on choosing a single technology, but is aimed at promoting multiple approaches for achieving a fuel-efficient economy.