Surprise: Nissan’s Electric Cars to Be Made in the USA

Jun 23, 2009

Japanese motor giant Nissan will begin building electric vehicles and batteries in the United States as soon as 2010, thanks to U.S. government incentives announced today.

The news carries a promise of green jobs for a struggling section of Tennessee. It also means that a cut of the $25 billion auto stimulus package that Congress passed last September will be going to a foreign company.

Nissan won approval from the Department of Energy (DOE) for $1.6 billion in special low-interest loans earmarked for making American vehicles greener. Ford and electric car start-up Tesla Motors were the other recipients, landing loans of $5.9 billion and $465 million, respectively.

The decision by the DOE to include the Tokyo-based automaker is yet another sign of Japan's rising clout in the world's nascent EV market.

Under the plan, Nissan will invest its loan dollars in building electric car assembly lines at its Smyrna, Tenn. plant. The factory will be capable of churning out 50,000 to 100,000 electric vehicles a year by 2012.

The company will also build high-performance lithium-ion batteries in Smyrna in cooperation with the Japanese IT firm NEC Corporation.

The news bodes well for green jobs at a time when new jobs are few. The Nissan plant in Smyrna has been downsizing its workforce through voluntary buyouts, the Tennessean reports. Unemployment in the county, and across the state, hit 10.7 percent in May.

Nissan was the only foreign company to request a chunk of the $25 billion from the Department of Energy's Advanced Technology Vehicles Manufacturing program, which was designed to help foundering carmakers retool their aging plants to develop more fuel-efficient cars. Nissan's request, made in February, sparked an outcry among opponents who said U.S. taxpayer dollars should help U.S. automakers only.

But Nissan, it seems, is an ideal fit for the funds.

The company is betting big on the wide-open, all-electric car segment, just as President Obama's administration is getting anxious to spark the manufacturing of EVs and batteries at home. At this stage, the Japanese carmaker is simply a wiser U.S. investment than at least some of its Detroit competition.

In a statement, Energy Secretary Steven Chu explained the government's selections:

"By supporting key technologies and sound business plans, we can jump-start the production of fuel-efficient vehicles in America. 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."

Nissan declared in May that it would beat GM's highly publicized Chevy Volt to market, with plans to sell an electric vehicle in the U.S. in 2010. But who would have thought then that it would actually end up building the car in America?

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