Ford Motor Company closed last week on its Department of Energy loan of $5.9 billion, according a statement released on Thursday by Department Secretary Steven Chu. The loan to Ford is the first to be finalized since the program was appropriated in the fall of 2008.
The funds will be used to transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce vehicles that are more fuel efficient.
The loan is part of the Energy Department’s Advanced Technology Vehicles Manufacturing program, building on steps taken by the Obama Administration to develop “innovative advanced vehicle technologies” to create thousands of clean energy jobs while reducing U.S. dependence on foreign oil.
The Administration plans to require an average fuel economy of 35.5 miles per gallon by the year 2016. These standards are expected to reduce U.S. oil consumption by approximately 1.8 billion barrels, prevent 950 metric tons of greenhouse gas emissions, and save consumers more than $3000 in fuel costs.
“This investment is part of our commitment to creating the clean energy jobs of the future while supporting American innovation,” U.S. Energy Secretary Steven Chu said. “We can revitalize the American auto industry and at the same time reduce our dependence on oil and cut our carbon pollution.”
On June 23, 2009, DOE issued a conditional loan commitment to Ford to finance up to 80% of qualified expenditures to improve the efficiency of light vehicles “using technologies that improve internal combustion engines and transmissions, reduce vehicle weight, reduce vehicle drag with more aerodynamic designs, and improve vehicle efficiency through the development of hybrid and plug-in 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, and save more than 200 million gallons of gas a year.
The Advanced Technology Vehicles Manufacturing Loan Program is focusing on helping domestic manufacturers apply the best available technologies to improve the efficiency of the vehicles they produce. In June of this year, the Department of Energy announced conditional loan offers to Ford Motor Company, Tesla Motors, and Nissan Motors for a total of $8 billion.
Congress appropriated the program $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.
The Department plans to make additional loans under this program over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.
Source:
U.S. Department of Energy
