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U.S. Energy Secretary Steven Chu said Thursday automakers are capable of going beyond the 34.1 miles per gallon fleetwide fuel efficiency standards proposed by the Obama administration for the 2016 model year.

He made the statement as the department announced it had finalized Ford Motor Co.’s $5.9 billion low-cost government loan.

Ford will start drawing on the loan by month’s end to retool factories in Michigan, Kentucky, Missouri and Ohio to produce more fuel-efficient models.

General Motors Co. and Chrysler Group LLC have pending applications seeking loans from the program.

The department plans to make additional loans under this program over the next several months to large and small automakers and parts suppliers.

Earlier this week, the Environmental Protection Agency and National Highway Traffic Safety Administration proposed increasing fuel efficiency standards by 4.3 percent annually between the 2012 model year and 2016 model year.

Those changes will cost the auto industry $60 billion and add about $1,100 to the cost of an average vehicle.

Chu said that the administration’s proposal essentially advances what Congress required in 2007, when it said fuel efficiency standards must be at least a fleet-wide average of 35 mpg by 2020.

“Our personal vehicles, we haven’t been making much progress,” Chu told a clean energy panel outside of Philadelphia.

“President Obama has increased the fuel mileage standards, advanced them by four years. We can do a lot more.”

Chu said “there’s some very exciting opportunities in American companies for electric hybrids and all electric cars.”

The administration last month awarded $2.4 billion in grants to boost electric vehicles and battery technology.

Pennsylvania Gov. Ed Rendell disclosed that CT&T, the South Korean company behind the all-electric e-Zone car and city EV, plans to build the vehicles in Pennsylvania and open distribution centers there.

The vehicles don’t go faster than 40 mph and are only for city use.

“It’s not a golf cart. It’s a real car,” Rendell said.

CT&T announced last week it would build the two small electric vehicles at a joint venture in Riverside County in southern California.

“I think electric cars are coming faster than anybody thinks,” Rendell said.

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