June 23 (Bloomberg) -- Ford Motor Co., the only U.S. automaker not receiving emergency federal loans, will get $5.9 billion in government financing to speed work on cars with better fuel economy.

Nissan Motor Co. will be able to borrow $1.6 billion under the $25 billion U.S. Energy Department program, and Tesla Motors Inc., a closely held maker of battery-powered autos, was approved for $465 million, the agency said today.

The aid is separate from bailouts for General Motors Corp. and Chrysler LLC. It was part of Congress’s 2007 energy bill to help automakers boost average fuel economy by about 40 percent, to 35 miles (56 kilometers) per gallon by 2020. President Barack Obama moved up the deadline in May to 2016.

“Ford may have an advantage depending on how quickly they get their new, fuel-efficient products out the door,” said Michael Robinet, an analyst at consultant CSM Worldwide in Northville, Michigan. “GM and Chrysler have other issues to worry about.”

With the new Chrysler Group LLC out of bankruptcy, the Energy Department is studying how to help the Auburn Hills, Michigan-based automaker’s fuel-economy projects, Secretary Steven Chu said. He said the agency also is reviewing plans for mileage improvements at GM, which remains in Chapter 11.

‘There Is Money’

“There is money there,” Chu said at Ford’s Dearborn, Michigan, research center. “We are trying to stretch all the dollars as far as we can. We would like to help all the auto manufacturers who manufacture in the U.S.”

Today’s loan announcements totaled $7.97 billion, or almost a third of the Energy Department’s available funds. The agency had received more than 100 applications for the aid, a spokeswoman, Ebony Meeks, said today.

Nissan, which is based in Tokyo and is Japan’s third- largest automaker, said it will use the federal cash to modify its Smyrna, Tennessee, plant to make electric cars and lithium- ion battery packs. San Carlos, California-based Tesla said most of the U.S. money would go to develop an electric sedan.

Ford said it will apply the funding toward a variety of fuel-saving technologies, including electric vehicles and so- called direct-injected gasoline engines that improve mileage as much as 20 percent.

Factory Conversions

The low-interest loans will also help Ford convert two truck factories to build fuel-efficient cars, including a former sport-utility vehicle plant in Wayne, Michigan, that will begin making the Focus small car next year. Ford plans to offer an electric version of the Focus.

Repayment of the loans will start in 2012, Chief Executive Officer Alan Mulally told reporters in Dearborn, where Ford is based.

Chu said distributing the $25 billion in loans to automakers and suppliers has been his top priority since becoming energy secretary in January. Financial difficulties at Detroit-based GM and Chrysler complicated the effort, he said.

“There was a viability issue we worked through. In Ford’s case, there wasn’t really an issue,” Chu said on a stage in the atrium of the automaker’s Michigan research lab. Mulally, who was sitting next to Chu, leaped from his chair and shouted, “Yeah!”

Ford requested $5 billion initially. It is seeking a total of $11 billion in Energy Department loans by 2016, said Mike Moran, a spokesman.

$14 Billion

Mulally said Ford is investing $14 billion on improving fuel efficiency over the next seven years. Those improvements to more than a dozen models, including the Focus, Escape, Taurus and F-150 pickup, will save 2.5 billion gallons of gasoline by 2015, he said.

Ford gained 15 cents, or 2.8 percent, to $5.53 at 4:15 p.m. in New York Stock Exchange composite trading. Nissan’s American depositary receipts fell 22 cents, or 1.8 percent, to $12 in Nasdaq Stock Market composite trading.

After posting a record $14.7 billion loss in 2008, Ford has said it’s benefiting from not taking government loans to fund its operations. The second-largest U.S. automaker has gained U.S. retail market share in seven of the past eight months and said it is attracting customers from GM and Chrysler.

All-Electric Autos

Working on efficiency improvements to conventional engines sets Ford apart from the plans at Nissan and Tesla. Nissan said its spending would only go to electric vehicles, while Tesla doesn’t sell a gasoline-powered auto.

Nissan’s Smyrna factory will eventually have the capacity to build as many as 150,000 electric vehicles, said Dominique Thormann, the automaker’s senior vice president for North American operations.

“It’s an exclusively U.S.-centric project: cars made in America for American consumers,” Thormann said in an interview. “It’s a loan, it’s not a gift.”

Tesla’s new battery-powered sedan will be priced at less than half the $109,000 cost of its electric roadster, the company’s only model, Chu said.

“We’ll be spending money for vehicle engineering right away,” Diarmuid O’Connell, Tesla’s vice president of business development, said in a phone interview today.

Tesla is partially owned by Germany’s Daimler AG. It will initially focus on building a plant in Northern California to make battery packs and electric drive components, O’Connell said. It plans to sign a contract soon to convert a factory in Southern California to assemble the Model S sedan, he said.

To contact the reporters on this story: Keith Naughton in Dearborn, Michigan, at Knaughton3@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: June 23, 2009 16:44 EDT