DOE Loans $5.9 Billion to Ford, Offers $528.7 Million in Loans to Fisker
September 23, 2009
DOE loaned Ford Motor Company $5.9 billion on September 17 to help the company transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce more fuel-efficient vehicles. The agency also offered a conditional loan of $528.7 million to Fisker Automotive on September 22 for the development of two lines of plug-in hybrids. The loans are part of DOE's Advanced Technology Vehicles Manufacturing (ATVM) Program, which supports the development of innovative vehicle technologies to create thousands of clean energy jobs while helping reduce the nation's dependence on foreign oil. The Ford loan is the first to be finalized since the program was appropriated in the fall of 2008. The funding announced will help Ford meet the new fuel economy targets proposed by the Obama Administration.
The loan to Ford will help the company employ technologies that improve fuel economy, including advanced internal combustion engines and transmissions, lighter vehicles, sleeker aerodynamic designs, and advanced technologies such as hybrid and plug-in hybrid electric vehicles. The loan proceeds will enable Ford to raise the fuel efficiency of more than a dozen popular models, representing close to two million new vehicles annually. The advances could save more than 200 million gallons of gasoline per year. See the DOE press release.
DOE loans could help launch the Fisker Karma, a plug-in hybrid that should appear in showrooms next summer, as well as a future plug-in hybrid from the same company.
The conditional loan to Fisker Automotive will be split in two. In the first stage of the program, Fisker will use a $169.3 million loan for engineering design, development, and integration costs as it works with primarily U.S. suppliers to complete the company's first vehicle, the Fisker Karma. The work will be conducted at Fisker's office in Pontiac, Michigan, with support from its headquarters in Irvine, California. While the final assembly of the Karma will be done overseas, more than 65% (based on cost) of the parts required for Karma will come from U.S. suppliers. The second stage will draw on a $359.36 million loan for Fisker's "Project Nina," which involves the manufacture of a plug-in hybrid in the United States. Fisker plans to produce up to 100,000 of the U.S.-made vehicles per year, starting in late 2012. Both Fisker vehicles will be driven by electric motors powered by a lithium-ion battery, or, when that is depleted, a generator driven by an efficient gasoline engine. The electric-only range will be more than most people drive each day, and the battery can be charged at home overnight. Using gas and electric power, Fisker's plug-in hybrids will have a cruising range of about 300 miles. See the DOE press release.
The ATVM Program focuses on helping domestic manufacturers apply the best technologies to improve their vehicle efficiency. DOE has also offered conditional loans of $1.6 billion to Nissan North America, Inc. and $465 million to Tesla Motors, but has not yet closed on those loans. The program was appropriated $7.5 billion to support up to $25 billion in loans to companies making cars and components in U.S. factories that increase fuel economy at least 25% above 2005 fuel economy levels. DOE plans to make additional loans under the program over the next several months to both large and small auto manufacturers, as well as parts suppliers. See the ATVM Program Web site.