The loans, approved by the House as part of a larger spending bill Wednesday, are intended to help the industry refurbish decades-old plants and develop advanced batteries and gas-electric hybrids.
This is a major win for General Motors, Ford, and Chrysler, who lobbied for the funding as they dealt with a sluggish economy and weak sales.
“We all know that there is real growth for our economy in this sector of jobs -- green jobs, alternative fuel jobs -- and I think we all feel the stresses on our domestic auto producers,” said Senator Claire McCaskill, a Montana Democrat.
The loans are designed to help automakers meet costly new fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40% increase.