The US Department of Energy has given conditional commitment loan worth $259m to Alcoa to manufacture high strength aluminum for light weight vehicles.
The loan will support the aluminum makers Tennessee manufacturing facility, where the company is planning to manufacture high-strength aluminum for the North American automakers who are looking to build lightweight vehicles.
The conditional commitment is a part of the Advanced Technology Vehicles Manufacturing (ATVM) loan program, and has come after improvements were made to the program last year.
The expansion of the company's Tennessee plant will help Alcoa manufacture additional aluminum sheet that can be used in vehicles to boost fuel economy by reducing vehicle weight while still maintaining safety.
Alcoa expects the expansion of the production to create 200 permanent full-time jobs, in addition to 400 jobs at the peak of construction.
US Secretary of Energy Ernest Moniz said: "The Department's ATVM loan program can play an important role in helping to finance expanded domestic manufacturing of fuel-efficient technologies that will support the next generation of advanced vehicles and protect the environment by reducing greenhouse gas emissions.
"To date, the program has supported the production of millions of American-made cars that are more fuel-efficient and technologically advanced than previous models."
