Ford Motor Co will receive nearly $5.9 billion in U.S. government loans to spur development of more fuel-efficient vehicles, the Obama administration said on Tuesday.
Japan's Nissan Motor Co Ltd will receive $1.6 billion, and start-up Tesla Motors Inc will receive $465 million in advanced technology financing from the Energy Department program.
By supporting key technologies and sound business plans, we can jumpstart the production of fuel-efficient vehicles in America, Energy Secretary Steven Chu said at Ford headquarters.
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, he said.
The agency plans additional loans over the next several months to automakers and suppliers.
Chu said the administration began talks with Chrysler Group LLC 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 Corp, 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.
Chrysler is operating in an alliance with Italy's Fiat.
There is money there -- I wouldn't say set aside -- but we are trying to stretch these dollars as far as we can, Chu told reporters.
Both Chrysler and GM rely on government bailout funds to operate. Ford, struggling like other companies with the industry's sharp sales decline this year, is the only U.S. auto manufacturer that did not seek bailout assistance.
Ford will receive loan funds through 2011 to retool factories in Michigan, Ohio, Illinois, Kentucky and Missouri in order to produce 13 models. Ford is focusing on electrification and improvements to conventional engines as well as converting two truck plants for car production.
The loan is part of a $14 billion investment Ford plans in advanced technology vehicles over the next seven years, said Ford Chief Executive Alan Mulally.
The No. 2 U.S. automaker hopes most of that financing will come from government loans.
Nissan's North American unit will receive the funds to retool its Smyrna, Tennessee, facility to build electric cars and an advanced battery manufacturing plant, Chu said.
Tesla, based in San Carlos, California, will receive funds to build electric drive trains and electric vehicles.
Ford shares were up 14 cents, or 2.6 percent, to $5.52 in early afternoon trading on the New York Stock Exchange.
(Reporting by Kevin Krolicki; Editing by John Wallace and Tim Dobbyn)