AP source: Ford, Nissan, Tesla to get government loans
WASHINGTON -- The Energy Department is expected to announce Tuesday it is lending money to Ford and two other automakers from a $25 billion fund to develop fuel-efficient vehicles.
Energy Secretary Steven Chu is scheduled to announce the loan financing for Ford Motor f, Nissan nsany and Tesla in Dearborn, Mich., congressional officials said. They requested anonymity because an official announcement is pending.
Dozens of auto companies, suppliers and battery makers have sought a total of $38 billion from the loan program. Ford has asked to receive $5 billion in loans by 2011, but it is unclear how much money the automaker would receive. Nissan has applied for an undisclosed amount of assistance, while Tesla has sought $450 million.
The Energy Department declined to comment on the plans. Chu has not yet announced the first recipients of the loans, which have been closely watched by members of Congress from states with auto plants and suppliers.
Congress approved the loan program last year to help car companies and suppliers retool their facilities to develop green vehicles and components such as advanced batteries.
The loans are designed to help the auto manufacturers meet new fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40% increase over current standards.
General Motors and Chrysler have received billions of dollars in federal loans to restructure their companies through government-led bankruptcies, but Ford avoided seeking emergency aid by mortgaging all of its assets in 2006 to borrow about $25 billion.
General Motors has requested $10.3 billion in loans from the program, while Chrysler has asked for $6 billion in loans. Energy officials have said the loans could only go to "financially viable" companies, preventing GM and Chrysler from qualifying for the first round of the loans.
Ford has said it would invest $14 billion in advanced technologies over the next seven years. The loan application, which was submitted by the company late last year, would help Ford finance the investment.
Ford has said it intends to bring several battery-electric vehicles to market. The automaker has discussed plans to produce a battery-electric vehicle van in 2010 for commercial use, a small battery-electric sedan developed with Magna International by 2011 and a plug-in electric vehicle by 2012.
Ford spokesman Mark Truby declined to comment.
Nissan is developing an all-electric car with 100 miles of pure battery range for release in late 2010. The car will be made in Japan initially but company officials have said they eventually want to build the vehicle at Nissan's plant in Smyrna, Tenn.
Nissan spokesman Fred Standish said the automaker hoped "to be approved for this loan, as we provided a very strong business proposal. At this time, we have nothing further to say or to announce."
Tesla is seeking $350 million in loans for an assembly plant to build its Model S four-door sedan, which is scheduled to go on sale in 2011. The company is also seeking $100 million to finance an advanced battery and powertrain manufacturing facility.
Tesla spokeswoman Rachel Konrad referred questions about the loan program's timing and approval to the Energy Department.
The CEO of Tesla said Monday that the material cost of the electric car company's Roadster sports car has dropped to about $80,000, which should help the company reach profitability next month.
Elon Musk said in a blog post on Tesla's website that the material cost, which is the total cost of the parts and components that make up each vehicle, was as high as $140,000 in the summer of 2007.
The car currently has a starting sticker price of $109,000.
"Combined with a steady production volume of 20 to 30 per week in the third quarter this year and a good take up rate of the higher priced Roadster Sport, we expect to cross over into profitability next month," Musk wrote in his blog post.
The sticker price for the Model S is expected to be $49,900 after a $7,500 federal rebate for buying an electric vehicle.