Ford, Nissan, Tesla Receive Energy Department Funds. Chrysler, GM? Not So Much

June 23, 2009

Ford Motor Company, Nissan Motor Company, and Tesla Motors appear to be the big winners in a recent round of funding sponsored by the U.S. Department of Energy. The money comes via a new, $25 billion loan program designed to boost the production of fuel-efficient vehicles; approximately $10 billion of that total will be doled out during this first round. U.S. Energy Secretary Steven Chu is expected to make the official award announcements today.

This is great news for Ford, which had asked for up to $11 billion, but in the business plan it presented to the Senate Banking Committee last December, it had conservatively estimated awards of $5 billion in total through 2011. Chances are good that Ford will walk away with the majority of the $10 billion from this round. The exact use to which Ford will put the funds hasn't yet been announced, but it will likely involve re-tooling facilities to accommodate the production of new-tech vehicles, since that's program's funding priority.

The dollar figure of Nissan's ask hasn't been made public, but the funds it receives will be used to prep its Smyrna, Tennessee plant for production of the all-electric vehicle it's planning to release in late 2010 (via its alliance with Renault).

Tesla's award will likely be the smallest of the three loans announced today: the California-based automaker had requested a total of $450 million, most will be used to produce its Tesla Model S. (Which means that Tesla CEO Elon Musk's optimism a few months back was well-founded. Nicely played, Elon.)

You might recall that we first mentioned the DOE program a few months ago in conjunction with Chrysler, which had submitted a funding request of $224 million to the DOE and its twin alt-energy programs: the Electric Drive Vehicle Battery and Component Manufacturing Initiative and the Transportation Electrification Initiative. Unfortunately, Chrysler and GM were both ruled ineligible because they're still plowing through bankruptcy-related restructuring.

However, all isn't lost for Chrysler, GM, and the other 70 companies that applied for DOE funds: although the programs will cough up $10 billion in loans for the 2009 calendar year, that leaves $15 billion to be distributed later, and with some in congress pushing for the program to beef up to a total of $50 billion, the opportunities could keep coming. If at first you don't succeed...

[DetNews, Freep]

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