Nissan Motor Co. plans to build electric vehicles at its plant in Smyrna, Tenn., to gear for mass-production of its core environmentally friendly cars, Chief Executive Officer Carlos Ghosn said Tuesday.

Japan’s third-largest carmaker plans to start assembling batteries and cars there by the business year ending in March 2013 with annual production capacity exceeding 100,000 units, he said.

Nissan, 44 percent owned by Renault SA, aims to tap low-interest loans planned by the U.S. government for environmentally friendly cars. Initial targeted customers include city officials such as mayors, and corporations.

“We have applied, and we have submitted, and we waited for the U.S. government permission,” Ghosn told reporters after the company’s annual shareholders’ meeting in Yokohama.

Kyodo News reported Tuesday that the U.S. government is expected to announce as early as Wednesday that Nissan and Ford Motor Co. will be provided low-interest loans for “eco-cars.” Kyodo said the low-interest loans to Nissan will top $1 billion.

The plan to build electric vehicles in Tennessee is part of Nissan’s global strategy to introduce such cars in Japan and the United States in 2010 and mass-produce them globally in 2012. Nissan said last month it also plans to mass-produce electric vehicles in Europe and China.

But the Tokyo-based carmaker already lags behind Mitsubishi Motors Corp., which will begin selling an electric vehicle next month.

Ghosn reiterated the importance of electric vehicle production in Nissan’s strategy. “We think we bet in the right direction,” he said.

Experts have said, however, there are still hurdles for electric vehicles to gain widespread global market acceptance, particularly because of their high price and lack of support infrastructure.

Ghosn said the scale of production is important to make electric vehicles affordable.

“There is no reason that (the) EV is more expensive than diesel or gasoline cars,” except for the factor of volume, he said.

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