Updated: Nissan to roll out electric cars in the US with aid of $1.6bn loan

Japanese auto giant Nissan has confirmed it is to press ahead with plans to produce electric cars and lithium ion battery packs in the US after President Obama announced $8bn worth of new loans to help fund the auto sectors development of low carbon technologies.

The Japanese automaker is to recieve a $1.6bn loan to help fund the manufacture of up to 150,000 electric vehicles a year at its plant in Smyrna, Tennessee, creating 1,300 jobs. It also plans to construct a new lithium ion battery plant at the Smyrna site, which would annually produce 200,000 batteries for electric cars.

Nissan is set to preview its first electric car in August, with a launch in the US and Japan to follow in 2010. It has also set the ambitious target of producing 100,000 electric vehicles a year by 2012.

The new funding is part of the recently announced $8bn US loan package, which is intended to stimulate production of energy-efficient cars in the country and is being distributed under the US Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program.

Another beneficiary of the $8bn package is California-based Telsa Motors, which is will receive $465m to finance a plant for its electric Model S sedan. Tesla also plans to build a facility to manufacture battery packs and electric drive trains for its Roadster and Model S vehicles, in addition to the Smart minicar by Daimler, which recently acquired 10 per cent of Tesla.

Ford, meanwhile, is to receive $5.9bn through 2011 to improve the mileage of its existing cars and build an electric version of its entry-level Focus compact sedan – one of the company's most popular models worldwide.

"By supporting key technologies and sound business plans, we can jumpstart the production of fuel efficient vehicles in America," said energy secretary Steven Chu. "These investments will come back to our country many times over – by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions."

His comments were echoed by Barack Obama, who said the new loans would make it possible for the car firms to meet recently introduced standards requiring a 40 per cent improvement in fuel efficiency.