US Department of Energy finalises $5.9bn loan for Ford to develop hybrid and electric vehicles

21st September 2009

The US Department of Energy has finalised a loan of $5.9bn for Ford Motor Company to invest in fuel efficiency through the development of technologies such as hybrid and plug-in electric vehicles.

The DOE first issued the conditional loan commitment on 23 June 2009 including offers to Ford Motor Company, Tesla Motors and Nissan Motors totalling $8bn. The loan to Ford Motor Company is the first of these to be confirmed since the programme was appropriated by Congress to support up to $25bn to companies that increase the fuel economy.

The loan is part of the Government’s Advanced Technology Vehicles Manufacturing programme. US Energy Secretary Steven Chu, who announced the finalisation of the loan, said ‘This investment is part of our commitment to creating the clean energy jobs of the future while supporting American innovation’.

The programme aims to assist the government’s target of creating a fuel economy of 35.5m miles per gallon by 2016, which would reduce oil consumption by an estimated 1.8 billion barrels and prevent approximately 950m metric tons of gas emissions. Secretary Chu added that the investment is part of a drive to reduce dependence on oil and cut carbon pollution.

The loan commitment to Ford is intended to finance up to 80 per cent of expenditures to improve the efficiency of vehicles using technologies that improve internal combustion transmissions engines, reduce vehicle weight and drag through aerodynamic design and develop hybrid and electric vehicles to improve efficiency. The loan to Ford will help to improve the efficiency of 12 widespread vehicle models, according to a statement.

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