Nissan agrees $1.4bn loan to build electric cars in Tennessee

February 2, 2010

The federal government is to loan motor manufacturer Nissan $1.4 billion to retool its Tennessee factory to build electric vehicles and batteries.

150,000 Nissan LEAF vehicles will be built each year at the Tennessee plant

The US Department of Energy closed the deal on Friday with Nissan North America, Inc., in a project it said would create up to 1,300 jobs at the plant in Smyrna.

The plant will produce Nissan’s all-electric LEAF vehicle, which will initially be made available for fleet and retail customers before the Smyrna facility ramps up to produce 150,000 vehicles a year.

The LEAF, a five-passenger vehicle powered by lithium-ion battery packs, will offer a range of 100 miles on a full charge according to Nissan.

The vehicles produced at the Smyrna plant will conserve up to 65.4 million gallons of gasoline each year, the Department claimed – the equivalent of six times the amount of oil spilled by the Exxon Valdez in Alaska in 1989.

The site will also produce about 200,000 battery packs each year.

Reducing dependence

“This is an investment in our clean energy future. It will bring the United States closer to reducing our dependence on foreign oil and help lower carbon pollution,” said Energy Secretary Steven Chu.

“We are committed to making strides to revitalize the American auto industry and supporting the development of clean energy vehicles.”

Meanwhile, Nissan is working with US states, counties, municipalities, and electric utilities to prepare markets for the introduction of electric vehicles, including the installation of charging stations.

The federal government is now supporting a number of motor manufacturers to help them bring forward electric vehicles in order to create jobs and cut America’s dependence on foreign oil.

It agreed a $5.9 billion loan with Ford back in September and last week signed a $465 million loan with California firm Tesla.

It has also signed a conditional commitment with Fisker Automotive to build plug-in hybrid electric vehicles and another with component manufacturer Tenneco, Inc.

The Department was provided $7.5 billion for credit subsidy costs by Congress to cover up to $25 billion in direct loans to companies making cars and components in US factories that increase fuel economy at least 25 percent above 2005 fuel economy levels.