Nissan Motor's prototype full-electric car is presented at a test-drive event in Nissan Oppama Grandrive in Yokosuka on August 6, 2008. The third largest automaker in Japan aims to start selling an electric car in the United States and Japan in 2010 and the rest of the world in 2012.
(Tatsuyuki Tayama/AFP/FILE)Photos (1 of 1)
US gives carmakers $8 billion to go electric
The Energy Department made the announcement Tuesday, just as Nissan said it will start selling an all-electric car in the US next year.
By Mark Trumbull | Staff writer/ June 23, 2009 edition
The shift toward electric-powered vehicles gained momentum Tuesday, as major automakers outlined production plans and became the first to tap a $25 billion government fund.
Ford, Nissan, and the upstart California carmaker Tesla will get the first chunk of the fund to be disbursed – $8 billion in loans to boost development and production of advanced energy-efficient cars in the US. The Energy Department, which announced the funding, said it plans to make loans in coming months to other large and small automakers and parts suppliers.
Separately, Nissan said it will start selling electric cars in Japan and the US next year and to have them in mass production by 2012. Nissan will use the government loan to support its plan.
The announcements signal an industry in transition. Even as carmakers struggle to weather a deep recession, they want to be ready to meet the changing demands of consumers and government policymakers. They need to make cars that their customers can afford to buy. But they also can’t afford to be caught without cleaner technologies at a time of potentially rising oil prices and tightening standards for emissions.
At a shareholders meeting in Japan, Nissan CEO Carlos Ghosn said he’s expecting to thread that needle.
“If it’s not affordable, it’s not going to work,” he said, according to an Associated Press report. But “I can tell you I’m not at all worried about how to sell these cars, because there is an appetite for zero-emission cars.”
The goal of the loan program, passed by Congress and the Bush administration in 2007, is to accelerate clean-car production and sales. But the funding will also act as a kind of jobs program for a hard-hit industry.
Meanwhile, the Obama administration is introducing additional carrots and sticks – such as a recent move to tighten emissions standards – to push carmakers and consumers toward so-called “zero-emission” vehicles. Legislation to combat the threat of climate change could push the industry further down the electric road.
Energy Secretary Steven Chu announced the new loans in Ford’s home town of Dearborn, Mich. “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 department said the program will promote multiple clean-car technologies, a goal evident in the first loans announced.
- Ford Motor Co. will receive $5.9 billion to finance engineering advances in traditional internal combustion engines as well as gas-electric hybrids.
- Tesla Motors in San Carlos, Calif., will receive $465 million, mainly to ramp up production of an all-electric family sedan. The company predicts its Model S will have a base price of $49,900 (after a $7,500 federal tax credit) and run as many as 300 miles on a single charge.
- Nissan will get $1.6 billion to produce electric cars and batteries in Smyrna, Tenn. Where Toyota and other large automakers have been pushing gas-electric hybrids, Mr. Ghosn has committed Nissan to an all-electric strategy. The new Nissan may cost about 4 cents a mile to operate versus 13 cents a mile for a gas-powered car that gets 30 miles per gallon, according to an Electric Auto Association newsletter.
Comments
3. ElectricFuture | 06.24.09
The Tesla CEO/investor is a power hungry crook. Martin Eberhard should never have taken money from Elon Musk - a money grubbing scoundrel. A lesson he no doubt will never forget in his life. Unfortunately, vulture capitalists ripping-off entrepreneurs is the norm rather than the exception in Silicon Valley.
For $465M, the govt could have easily started another Tesla with a new public-private ownership structure with highly motivated electric car experts like the real founder and the brains behind Tesla - Martin Eberhardt.
It sucks to see vultures like Musk get undeserved fame, credit and now tax payer handouts and govt largesse. ***?! Where’s the justice. Does the twit from the govt who agreed to this deal know the true story. Where’s the public’s voice on this unjust inside job?
4. Ryan | 06.25.09
Steven Chu sure is gonna make some money from his heavily vested interests and investments in batteries. Talk about an inside job.
5. David L. | 06.26.09
Thank goodness we have people in power who actually care about our future and our children’s future and not how fat their wallet is. Let’s hope this momentum continues!
We should all pay attention and keep an eye on our elected officials who act selfishly and cut deals with the lobbyist. Because, it’s these backroom “deals” that do nothing but hurt our Country and our People!
FYI, Ryan, if we are using more batteries, it means we are not buying foreign oil from Countries that don’t like use. So, if Steven Chu makes money on batteries good for him for having the insight to invest in something that’s good for our Country.
G-D Bless America!
6. sparkadore | 06.26.09
What about the market. The government is now choosing who to loan to. And what are the terms?????
Those not in the government gravy train are at a disadvantage.
7. fred | 06.27.09
No hope that electric vehicule loaded with lithium-ion batteries will become popular! that’s just waisted money! just imagine to drive a car with only one or two galons of gas in the tank: that’s an image of the mileage autonomy of this kind of technologies…. really no hope!
8. Dr. Gary | 06.27.09
Electrics are status symbols, for which trendies are willing to pay a premium.
That’s helpful, providing a market of early-adopters that want to be among the first to conspicuously consume less energy-consuming vehicles.
Power to them, (clean of course!) and to the government for supporting innovation.
9. Andrew | 06.27.09
Leaving it up to the private marketplace is very short term and foolish, in my opinion, since Americans have shown at $2 a gallon they will go out and buy S.U.V.s. I personally think that the best way to coax Americans into driving electric cars is to tax gasoline at the pump and give tax incentives for electric cars–perhaps starting in high pollution zones such as California.
As for all the neigh sayers, I bet a lot of people were saying the same thing about gasoline cars (which were originally electric) at the start of the century. Car manufacture was encouraged as matter of national defense by the governments of countries since in World War 1 it was seen as advantagous in warfare.
10. Byron | 06.29.09
Why is 1.6 Billion in U.S. taxpayer money being given to a foreign car company? If there is enough demand and Nissan can really pull this off then why do they need this money to make it happen?
The current administration is generating more questions than solutions and I am concerned that these efforts, involuntarily funded by American tax payers, are going to be about as successful as the stimulus funds were in bringing down this nations unemployment rate.
Trackbacks/Pingbacks
Leave a Comment
We do not publish all comments, and we do not publish comments immediately. The comments feature is a forum to discuss the ideas in our stories. Constructive debate - even pointed disagreement - is welcome, but personal attacks on other commenters are not, and will not be published.
Tip: Do not write a novel. Keep it short. We will not publish lengthy comments. Come up with your own statements. This is not a place to cut and paste an email you received. If we recognize it as such, we won't post it.
Please do not post any comments that are commercial in nature or that violate copyrights.
Finally, we will not publish any comments that we regard as obscene, defamatory, or intended to incite violence.
1. northern alberta | 06.24.09
I love this! Can’t wait to see how these vehicles will work in Northern Alberta in -40 on gravel roads and up and down hills and valleys, and towns are 100 km apart at least.