Ford and SK On Secure $9.63 Billion Loan for Three Electric Vehicle Battery Plants in the US
The US Department of Energy announced it will provide up to $9.63 billion in loans to Blue Oval SK, a joint venture between Ford Motor Company and South Korean battery manufacturer SK On, for the construction of three electric vehicle battery manufacturing plants in Tennessee and Kentucky.
In June of this year, the two parties had initially announced a loan support of $9.2 billion. The reason for the increase in loan amount is currently unclear; this loan has become the largest provided so far under the US government's Advanced Technology Vehicles Manufacturing program, aimed at helping American companies catch up with Chinese companies that are leading in battery manufacturing.
This funding will be provided to Blue Oval SK, the joint venture operated by Ford and SK On. The two companies have already invested over $11 billion in the construction of these three factories. According to plans, the first of the two factories in Kentucky will start production in early 2025, and the factory in Tennessee will begin production by the end of 2025.
It is estimated that once fully operational, the annual production capacity of electric vehicle batteries for these three factories will reach 120 gigawatt-hours (GWh).
Blue Oval SK stated in an interview with Reuters that due to the need for due diligence, including market, credit, financial, legal, and regulatory reviews, the US Department of Energy took 18 months to complete the loan approval process.
It is worth noting that this is not the only significant electric vehicle-related loan announced by the US recently. Not long ago, the US Department of Energy also announced a conditional commitment to provide a $7.54 billion loan to the joint venture of FCA US (Fiat Chrysler Automobiles US) and Samsung SDI for the establishment of two lithium-ion battery cell and module manufacturing plants in Kokomo, Indiana. Additionally, Rivian has recently received loan approval of $6.57 billion from the US Department of Energy. However, this loan is under close scrutiny by Vivek Ramaswamy, who will lead the newly established Department of Government Efficiency alongside Elon Musk.
