Energy Secretary Steven Chu said the loan to Fisker to develop two lines of plug-in hybrids will help save hundreds of millions of gallons of gasoline and offset millions of tons of greenhouse gas emissions by 2016.

This is the second loan to a small-scale electric or plug-in vehicle producer that focuses on high-priced models.

San Carlos, Calif.-based Tesla Motors Inc. received a $465 million loan in June to finance production engineering and assembly of the Tesla Model S, an all-electric family sedan with an expected base price of $49,900 after a federal tax credit.

A primary reason for the high cost of pure electric and plug-in vehicles is the cost of batteries. General Motors Co.’s Chevrolet Volt — an extended-range electric vehicle — will be low volume and priced in the upper $30,000 range.

“Luxury buyers are going to be willing to spend more, allowing automakers to build more of the technology into the vehicles,” said Erich Merkle, an auto expert who founded autoconomy.com.

The Energy Department said the Fisker project will create or save about 5,000 jobs for U.S. parts suppliers, and create thousands more to build plug-in hybrid vehicles in the United States.

This is the fourth loan out of the $25 billion automotive retooling program funded by Congress in September 2008. Earlier, $7.5 billion in loans went to Ford Motor Co. and Nissan Motor Co.

GM, Chrysler Group LLC and Delphi Corp. are among the companies that are still seeking loans under the program.

Vehicles built using the $25 billion loan program must be 25 percent more efficient than current models. Last week, the Obama administration proposed increasing fuel-efficiency standards to an average of 34.1 miles per gallon by the 2016 model year, an increase that the administration says will cost the auto industry $60 billion to meet.

In the first stage of its program, Fisker will use a $169.3 million loan for engineering integration costs as it works with primarily U.S. auto suppliers to complete the company’s first vehicle, the Fisker Karma. Engineers will also design tools and equipment and develop manufacturing processes.

The work will be conducted at Fisker’s Pontiac office with support from its headquarters in Irvine.

While the final assembly of the Karma will be done overseas, more than 65 percent — based on cost — of the parts required for Karma will come from U.S. suppliers.

The four-door Karma is scheduled to appear in showrooms in summer 2010, and the company said it has more than 1,500 pre-orders.

The second-stage funding from the Energy Department includes a $359.36 million loan for Fisker’s Project Nina, involving the manufacture of a plug-in hybrid in the United States. Fisker estimates that 75,000 to 100,000 of these vehicles will roll off assembly lines in the country every year beginning in late 2012 and will be priced around $45,000. But Fisker said with a federal tax credit of up to $7,500, the Nina will cost no more than $39,000 — a price still out of reach for most car buyers.

“This conditional loan represents a significant step in America’s future,” CEO Henrik Fisker said. “With it, Fisker Automotive can rapidly develop affordable, clean cars that satisfy our passion for driving and help restore the U.S. as an auto industry leader.”

Fisker Automotive has 45 dealers in about 20 states. It plans to have at least 100 dealers by 2012.

The company was founded by two industry veterans, but it has yet to produce many vehicles.

Fisker was design director for Aston Martin and president and CEO of BMW’s DesignworksUSA. Bernhard Koehler, Fisker’s chief operating officer, led design operations at Ford, Aston Martin and BMW.

The Energy Department said the projected annual sales of these vehicles would contribute significantly to the Obama administration’s goal of having 1 million plug-in hybrids on the road by 2015.

Many auto experts have called that goal highly unrealistic because there are only a few hundred on the roads today.

Automakers are introducing models all or partly powered by lithium-ion batteries holding twice the energy of nickel packs. While Toyota’s lithium version performed well and gave small fuel-economy gains because of lighter weight, nickel is favored for conventional, mass-market hybrids for its cost, said Kazuo Tojima, the carmaker’s senior staff engineer for batteries.

Lithium’s durability, stability and safety are assured, the Toyota City, Japan-based company’s tests showed, Tojima said.

The tests appear to be among the most thorough done by companies planning to introduce the batteries, said Menahem Anderman, president of consulting firm Advanced Automotive Batteries in Oregon House, Calif.

“We now know that a lithium-ion battery can work; that’s not really the question,” he said. “Cost is critical, and we still don’t know enough about long-term durability.”

Toyota has sold more than 2 million hybrid cars and light trucks worldwide since introducing the Prius in Japan in 1997, almost all using nickel. The automaker hasn’t announced plans to sell standard hybrids with lithium batteries in the U.S.

This year, Toyota will begin delivering test fleets in the U.S., Japan and Europe consisting of plug-in Priuses that can run 12 miles (19 kilometers) solely on lithium-ion battery power after charging at an electrical outlet. The car is being shown this week at the Frankfurt Motor Show.

The company also plans to sell a small electric car for urban commuters, powered solely by lithium packs, by 2012.

Nissan Motor Co. will begin offering battery-electric Leaf compact cars next year, which the Yokohama-based company says will travel 100 miles on a fully charged lithium pack. Mitsubishi Motors Corp. is selling in Japan the i-MiEV, a $51,000 electric minicar that also travels as far as 100 miles using only lithium-ion batteries.

Toyota doesn’t expect battery-powered cars to succeed in the mass market until 2020 because batteries are too costly and capacity limits their range.

“Electric vehicles of today are less costly than in 1990s, but if you compare them with the other vehicles out there they are still too expensive,” Executive Vice President Takeshi Uchiyamada said at news conference at the Frankfurt show. “Unless there is a very big breakthrough in battery costs, I don’t think electric vehicles can take a large market share.”

Audi has confirmed plans to launch a small electric city car, likely to be based on the VW Up! concept.

Peter Schwarzenbauer, who sits on the management board at Ingolstadt, told Autocar “We will offer a pure electric car” at last week’s Paris motor show.

Schwarzenbauer was responding to rumours that Mini is planning an electric version of the Cooper for the LA motor show in November.

He went on to reveal that the small electric Audi “will not be based on the A1”, the firm’s premium supermini, which was previewed by a concept car in Paris.

Based in Cape Town, South Africa the Optimal Energy company has designed a vehicle that seems very interesting to say the least.

Meet the Joule. It has contemporary styling, designed by Keith Helfet (Jaguar XJ-220 and F-Type). It is planned for production in late 2010.

Inside, the MPV has room for

6 and a large cargo area. Powered by lithium-ion batteries it is expected to have a short term range of 200km or about 125 miles. With it’s optional battery, the range jumps to 400km or 250 miles.

It’s steel space frame uses carbon composite components along with plastic body panels to save weight.

Optimal Energy claims it will take no longer then 7 hours to charge the batteries on the Joule and the approximate top speed is 130km/h or 80mph.

No pricing has been released as of date.

Initially the Joule will be available in front wheel drive, but additional motors will allow the Joule to be built in an all wheel drive configuration as well.