DEARBORN, Mich. (AP) -- The Energy Department said Tuesday it would lend $5.9 billion to Ford Motor Co. and provide about $2.1 billion in loans to Nissan Motor Co. and Tesla Motors Inc., making the three automakers the first beneficiaries of a $25 billion fund to develop fuel-efficient vehicles.
Energy Secretary Steven Chu announced the loan recipients at Ford's Research and Innovation Center in Dearborn. The loans to Ford will help the company upgrade factories in five Midwest states to produce 13 fuel-efficient vehicles.
Nissan was receiving $1.6 billion to retool its plant in Smyrna, Tenn., to build advanced vehicles and build a battery manufacturing facility. Tesla would get $465 million in loans to build electric vehicles and electric drive powertrains in California.
"By supporting key technologies and sound business plans, we can jump-start the production of fuel efficient vehicles in America," Energy Secretary Steven Chu said in a statement. "These investments will come back to our country many times over -- by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions."
Dozens of auto companies, suppliers and battery makers have sought a total of $38 billion from the loan program, which was created last year to help car companies and suppliers retool their facilities to develop green vehicles and components such as advanced batteries.
The loans were designed to help the auto manufacturers meet new fuel-efficiency standards of at least 35 mpg by 2020, a 40 percent increase over current standards.
Ford had been seeking about $5 billion in loans by 2011 and a total of $11 billion from the program to invest $14 billion in advanced technologies over the next seven years. The company said it will transform plants in Illinois, Kentucky, Michigan, Missouri, and Ohio.
Ford CEO Alan Mulally said in an interview with The Associated Press that the department approved the company's entire proposal through the 2011 period and it would help Ford meet the new fuel efficiency standards.
"This is a tremendous development," Mulally said.
General Motors Corp. and Chrysler Group LLC have received billions of dollars in federal loans to restructure their companies through government-led filings for bankruptcy protection, but Ford avoided seeking emergency aid by mortgaging all of its assets in 2006 to borrow about $25 billion.
Mulally said the loans Ford would receive from the Energy Department were part of a government-industry partnership and "had nothing to do with the emergency loans to keep General Motors and Chrysler in business."
Ford has said it intends to bring several battery-electric vehicles to market. The automaker has discussed plans to produce a battery-electric vehicle van in 2010 for commercial use, a small battery-electric sedan developed with Magna International by 2011 and a plug-in hybrid vehicle by 2012.
General Motors has requested $10.3 billion in loans from the energy program, while Chrysler has asked for $6 billion in loans. Energy officials have said the loans could only go to "financially viable" companies, preventing GM and Chrysler to qualify for the first round of the loans.
Nissan is developing an all-electric car with 100 miles of pure battery range for release in late 2010. The car will be made in Japan initially but company officials have said they eventually want to build the vehicle at Nissan's plant in Tennessee.
Tesla was seeking $350 million in loans for an assembly plant to build its all-electric Model S sedan, which is scheduled to go on sale in 2011. The San Carlos, Calif.-based company was also seeking $100 million to finance an advanced battery and powertrain manufacturing facility.
Associated Press Writer Ken Thomas reported from Washington, D.C.