Electric cars to bring 1,300 jobs to Nissan in Smyrna

Associated Press • June 23, 2009 Nissan Motor Co. will add up to 1,300 jobs at its Smyrna plant in Tennessee to begin producing electric, zero-emission cars, officials said today. Japan's No. 3 automaker said it will unveil its first electric vehicle in Japan on Aug. 2 and begin sales next year. "We are moving forward with zero-emission vehicles," Chief Executive Carlos Ghosn told a shareholders' meeting in Japan. Nissan will sell electric cars first in Japan and the United States after April 2010, and then mass-produce them globally in 2012. Initial output capacity at Smyrna will be more than 100,000 units per year. At full production, Smyrna will make up to 150,000 electric vehicles annually. Nissan anticipates production of the electric cars and battery packs may result in an increase of up to 1,300 jobs in Smyrna when full production is reached. Nissan will receive $1.6 billion in conditional loan commitments from the Energy Department to produce electric cars and battery packs in Smyrna, according to a statement from the U.S. Department of Energy. The loan will aid in the construction of a new battery plant and modifications to the existing plant. In addition to the Smyrna plant, Nissan will make electric vehicles in Japan and Europe, Ghosn said. The all-electric car is expected to have 100 miles of pure battery range. "The U.S. is going to be a very important market" for the company's electric vehicle strategy, he said. "I can tell you I'm not at all worried about how to sell these cars because there is an appetite for zero-emission cars." Other carmakers are also racing to produce fully electric cars. U.S.-based Tesla Motors has a prototype that is scheduled to be produced by 2011. Toyota Motor Corp. has said it plans to sell electric vehicles in the U.S. by 2012 while Chinese automaker Dongfeng Motor Corp. has teamed up with a Dutch-based company to develop and make electric cars. On Tuesday, the Energy Department said it will lend $5.9 billion to Ford Motor Co. and $465 million to Tesla, in addition to the $1.6 billion to Nissan, 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. Tesla will get loans to build electric vehicles and electric drive powertrains in California. 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. 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. Ford CEO Alan Mulally said the loans Ford will 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. Earlier this month, Nissan's smaller rival, Mitsubishi Motors Corp., launched its electric vehicle, the i-MiEV, with a price tag of 4.59 million yen ($48,300). Even the company acknowledged the i-MiEV is too pricey and said it aims to cut the price in the future. Ghosn said expensive electric cars are "for a niche" market which Nissan doesn't plan to target. He gave few details, but stressed that Nissan's zero-emission cars will come "with a very reasonable price." "If it's not affordable, it's not going to work," Ghosn told reporters. "We are not going to come with a very high price. We are going to come with a reasonable price," he said. "We are here to mass-market them." Ghosn brushed off criticism that Nissan is falling behind its bigger rivals — Toyota and Honda Motor Co. — in the increasingly competitive market for gas-electric hybrid vehicles. Ghosn said the global market for hybrid cars remains too small, with hybrid cars accounting for just 3.5 percent of the Japanese auto market in 2008, and 2.3 percent in the United States. Globally, the market for hybrid cars is below 1 percent, Ghosn said, attributing hype over gas-electric cars to heavy media coverage. Tennessean staff writer Bonna Johnson contributed to this story.