$8 Billion DOE Funding for Ford, Nissan and...Tesla!

Last Updated Jun 23, 2009 12:46 PM EDT

Money is starting to flow from the Energy Department's $25 billion loan program to develop U.S.-based advanced technology manufacturing capacity for fuel-efficient and battery vehicles, and the first $8 billion round goes to Ford, Tesla and Nissan.

Ford is set to receive $5.9 billion in funding through 2011 "to help finance numerous engineering advances to traditional internal-combustion engines and electrified vehicles." The company says it is raising the fuel efficiency of a dozen vehicles, including the Focus, Escape, Taurus and F-150 trucks--with a total of about two million annual production. As we've reported here, Ford is pioneering a new, more efficient engine technology called EcoBoost.

According to Sue Cischke, an environmental vice president at Ford, "We are very proud to be recognized right out of the chute like this." She said the company will save 2.5 billion gallons of fuel with the programs funded under the program, which include adding electrically assisted steering and six-speed transmissions to many models. Non-hybrid Fords will also get start-stop technology--a major step forward. Ford also has what Cischke called an "aggressive" program to convert at least 50 percent of its fleet to be compliant with E85 ethanol by 2012. Energy Secretary Steven Chu said Monday in Des Moines that he'd like to see all cars with E85 capacity--presumably to take advantage of new high-efficiency cellulosic ethanol capability.

Here's some relevant video: Tesla, whose electric Roadster can reach 60 mph in 3.9 seconds, is obviously the least conventional of the carmakers getting loan money. It is applying most of its $465 million to production engineering and assembly of its forthcoming-in-2011 Model S sedan. An additional $100 million is going to build a powertrain plant in California to employ 650 people. "Tesla will use the loan precisely the way Congress intended--as the capital needed to build sustainable transport," said Tesla CEO Elon Musk.

Nissan, the only foreign automaker to get loan funds, will apply its $1.6 billion to producing EVs and battery packs at its manufacturing complex in Smyrna, Tennessee--with eventual production capacity of 150,000 vehicles annually. The operation is anticipated to employ 1,300.

Jim Motavalli photo