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Dealers
Richard Read
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...
2012 Tesla Model S prototypeEnlarge Photo 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]
Responses (5 total)
By mutuelle #2, Posted: 6/24/2009
It's Tesla's time to get involved in the race ...And let's see if we are going have a good set,
By Jaxon #3, Posted: 6/24/2009
Taxpayers do not have unlimited funds -- but the government continues to spend money like it's their own pocket book.
When capitalism's business cycle veers into discomfort (unemployment, slowing sales and borrowing, etc.) -- the State (government) now suppresses recession with monetary policy (making money cheap and abundant) and fiscal policy (quantitative easing, injections of liquidity, stimulus programs, etc.) so nobody feels pain. But the problems are still there, just hidden for a time by the bailouts. They will continue to grow until another bailout is needed (e.g. Chrysler).
Capitalists and those that embrace the free market reject this narrow notion for many reasons. Chief among them is that fact that experience and progress is the byproduct as we surmount difficulty. The Marines say, pain is weakness leaving the body. These downturns are inefficiencies leaving the system. These loans will be used to prop up inefficient systems. Nobody truly learns. Nobody truly grows. Nobody progresses.
--
Stop the paronioa: You do not need to boycott car manufactures that accept bailouts. Capitalism thrives when you make a decision that fits you. You should find the car that you want -- and that meet the criteria important to you. Car manufacturers that accept bailout money will be required to add inefficiencies to their business model and are at a disadvantage to produce the car that meets your needs the best. You should make car manufacturers and dealers compete for your business.
So if you are thinking about a car, check out this process on this blog: http://excarsalesman.typepad.com/
Sincerely,
Ford Fan
@Jaxon: please note note that these are loans, not grants, and they have to be paid back--just like the funds the feds have given to Chrysler, GM, and numerous banks.
_
If you've never taken out/benefited from a loan or a credit card or anything, congrats to you, but most people and organizations take advantage of those instruments at some point. DOE loans work on the same principle.
By mutuelle #5, Posted: 10/21/2009
a person should find the car that he wants and which meets the criteria important to himself
By Mutuelle santé #6, Posted: 11/13/2009
Great car!
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