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Loans for auto makers to go green

CULTIVATING the next generation of fuel-efficient vehicles, the Obama administration said on Tuesday it would lend US$5.9 billion to Ford Motor Co and about US$2.1 billion to Nissan Motor Co and Tesla Motors Inc in a government-industry partnership to build green cars.

United States Energy Secretary Steven Chu said the three auto makers would be the first beneficiaries of a US$25 billion fund to develop fuel-efficient vehicles.

Ford will use the cash to update plants in Illinois, Kentucky, Michigan, Missouri and Ohio to make 13 fuel-efficient vehicles.

Nissan will receive loans of US$1.6 billion to retool its plant in Smyrna, Tennessee, to build electric vehicles and construct a battery manufacturing plant.

Tesla will get US$465 million in loans to build electric vehicles and electric-drive powertrains in California.

The loans were designed to help auto manufacturers meet new fuel-efficiency standards of at least 15 kilometers per liter by 2020, a 40 percent increase over current standards.

"These loans will help the auto industry meet and even exceed the president's tough fuel standards," Chu said at Ford's Research and Innovation Center in Dearborn, Michigan. "This means the most fuel-efficient cars in the world must be made right here in America."

Dozens of auto companies, suppliers and battery makers have requested US$38 billion from the loan program, which was created last year to give car companies and suppliers low-interest loans to retool their facilities for green vehicles and components.

Ford had been seeking a total of US$11 billion from the program to invest US$14 billion in advanced technologies over the next seven years.

The government said it will help Ford transform nearly 35,000 jobs into "green" engineering and manufacturing jobs.


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