Automaker loans help fuel efficiency
Carmakers Ford, Tesla and Nissan will be the first automakers to receive up to $25 billion to update their infrastructure so they can produce more fuel-efficient cars. The loan would help speed up production. Jeremy Hobson reports.
An all-electric vehicle is exhibited in Santa Monica, Calif. (David McNew/Getty Images)
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Steve Chiotakis: Today, some news about government loans to carmakers. But it's not what you expect. It's all in the name of making a more fuel-efficient car. Energy Secretary Steven Chu will announce funding to help companies update their infrastructure so they can start building more gas-saving models. Here's Marketplace's Jeremy Hobson.
Steve Chiotakis: Up to $25 billion will be lent to carmakers, thanks to a program Congress passed in 2007 but didn't fund until last year. It requires that the money be used to make cars at least 25 percent more efficient than the ones they're replacing. The first recipients are reported to be Ford, Tesla and the Japanese automaker Nissan.
Nissan's Alan Buddendeck spoke with me from the company's Tokyo headquarters this morning. He says getting a loan would speed up production on a number of fronts:
Alan Buddendeck: The actual production of electric vehicles at some point in the United States, as well as the electric batteries, you know, the lithium ion batteries that are the heart of the vehicle if you will.
GM and Chrysler are reportedly not on the list for loans from the Energy Department, because they are not considered "financially viable" companies.
In New York, I'm Jeremy Hobson for Marketplace.
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From MN, 06/23/2009
They are giving OUR tax money to a JAPANESE Company when American companies desperately need it..., ??? Are they nuts or just well-bribed?
From Eddyville, KY, 06/23/2009
Wouldn't that $25 billion be better invested not just in more efficient vehicle creation/design but in conjunction with a new paradigm that a national speed limit of 55 mph which would be more conducive to achieving that goal?
The out dated and silly parameters which presently dictate that vehicles be capable of reaching speeds which aren't legal in any state or accelerate like rockets complicates the issue unnecessarily. How much easier would it be to create any more efficient old or new technologies if the auto designers were not burdened by the ridiculous notion that such high speeds are necessary. 55 mph is fast enough and slower speeds even better as far as efficiency.
Economically, cheaper fuel will always be treated in a limitless fashion, both increasing demand and waste and exhausting limited resources which will inevitably give rise to higher and higher prices anyway. The limit must be imposed, if not by law then eventually by resource availability. The national speed limit of 55mph worked before, unfortunately the wrongheaded elimination of that law led us to where we are now. Wrongheaded propaganda such as the claims of the dangers of this slower speed limit and other industry driven misinformation has deprived the public of the truth. Instead of a more realistic and sensible approach to personal transportation many states since the repeal of that law have opted to increase limits to 70mph.
Without a better paradigm than the present speed is king mindset, that $25 billion is just like spitting in the wind.
From Plano, TX, 06/23/2009
It's time for a renaissance in car design. The old steel box concept is obsolete. You have new lightweight stronger than steel materials available, computer aided design. Get those creative juices going. Remember those futuristic looking streamlined bubbletop Hot Wheels cars we had when we were young? Make efficiency affordable and looking cool
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