U.S. grants $300 million for alternative fuel vehicles

The U.S. Energy Department will award $300 million to a clean cities program to help communities buy alternative fuel vehicles, Vice President Joe Biden and Energy Secretary Steven Chu said on Wednesday.

The funding from the U.S. government's economic stimulus package is designed to encourage states and cities to reduce their dependence on oil by helping pay for more than 9,000 alternative fuel and energy efficient vehicles, the Energy Department said.

It will also establish about 500 fueling and recharging stations for the vehicles, the department said.

Ethanol groups have called for greater use of so-called flex fuel vehicles that can use special fuel blends of up to 85 percent ethanol and 15 percent gasoline.

President Barack Obama has said he would like to see more electric vehicles in the United States by 2015.

(Reporting by Ayesha Rascoe; Editing by Marguerita Choy)