Nissan, U.S. Close $1.4 Billion Electric-Car Loan (Update2)

By Daniel Whitten

Jan. 28 (Bloomberg) -- Nissan Motor Co., Japan’s third-largest carmaker, closed on a $1.4 billion loan from the U.S. Energy Department that will be used to retrofit facilities in Smyrna, Tennessee, for making electric cars.

Nissan, which was awarded the money on a conditional basis in June, plans to remodel a plant in Smyrna to manufacture the Leaf electric vehicles and build an adjacent facility to make the lithium-ion batteries that will power the cars. The plant now makes Altima and Maxima passenger cars, Xterra and Pathfinder SUVs, and the Frontier pickup truck, according to Nissan’s Web site. 

“The loan is going to accelerate localization of production in the U.S., which we believe is an important aspect of mass marketing the vehicle in the United States,” Scott Becker, a senior vice president of finance and administration for Yokohama, Japan-based Nissan, said in a telephone interview.

The company plans to build 150,000 Leaf vehicles and 200,000 battery packs annually in Smyrna, the Energy Department said. Nissan is set to begin selling the cars in the U.S. in 2010, which initially will be made at facilities in Japan. Production at the Smyrna plant will start in 2012, Becker said.

The Energy Department has made available almost $8 billion in loans to automakers of the $25 billion that had been authorized by Congress in 2008. A department spokeswoman, Stephanie Mueller, said the agency may make additional announcements soon.

“We want to drive toward higher efficiency,” said Energy Secretary Steven Chu in a speech today in Washington announcing the loan’s closing.

Dearborn, Michigan-based Ford Motor Co., the second-largest U.S. automaker, closed a $5.9 billion loan from the department last year. Tesla Motors Inc., a San Carlos, California-based maker of electric cars, has secured $465 million. A $528.7 million loan to Irvine, California-based startup company Fisker Automotive Inc. has yet to close. 

To contact the reporter on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net.