Loan sought for electric cars by Nissan

Washington, February 9: Nissan Motor Co. announced today that it is seeking a federal loan under a U.S. program for fuel-efficient autos.

It is the first Japanese automaker to seek taxpayer-funded loans from the Energy Department to facilitate its US manufacturing plans.

The decision means that it is competing for U.S. funds with numerous American companies, including General Motors Corp., Ford Motor Co. and electric-car start-up Tesla Motors Inc.

Nissan did not disclose the amount of its loan request, which was submitted in December. The announcement came the same day as Nissan, slashed more than 20,000 jobs worldwide.

It also declared its intention to shift production out of Japan as part of a broad new effort to weather the economic downturn. Nissan, which suffered a net loss of $908 million for the quarter that ended in December, today projected a $1.92 billion operating loss for its year ending in March.

Energy Secretary, Steven Chu declared that for the federal loan, the U.S. Department of Energy may disburse some of the $25 billion in low-cost loans to successful applicants in coming weeks.

According to the Energy Department spokesman Phil West, rules for the program of the federal loan were established in November. The agency received 75 applications for projects totaling $38 billion, out of which only 26 were substantially complete.

Alan Buddendeck, Nissan's U.S. vice president of communications stated, that the U.S. officials had notified the company that its application met the initial requirements. It had cleared the first hurdle and had entered the second of four approval stages.

Nissan in a statement declared that "We are committed to the vision of energy independence, environmental sustainability, and the new energy economy and we are hopeful that the U.S. Department of Energy approves this loan request."

The main aim of the approval of the loan program by Congress was to help struggling US manufacturers upgrade production of cars and trucks, to meet the higher fuel standards in the next ten years.

To be eligible for the loan requirements, the Energy Department stated that the companies need to have operating facilities older than 20 years. This gives US manufacturers a clear edge. Nissan's Tennessee plant began operations in 1983. New projects are also considered.

Any manufacturer can apply, as long as the money is used to make autos at U.S. factories that produce cars with at least 25 percent better fuel economy.