The US energy department on Monday said it has finalised a $9.63bn (R165.46bn) loan to a joint venture of Ford and South Korean battery maker SK On to help finance construction of three new battery manufacturing plants in Tennessee and Kentucky.
The low-cost government loan for the BlueOval SK joint venture is the largest ever from the government's advanced technology vehicles manufacturing loan programme. SK On is the battery unit of energy group SK Innovation.
The final award — first reported by Reuters — is one of a series of actions by the Biden administration to boost electric vehicle (EV) production before president-elect Donald Trump takes office next month.
The amount is higher than the $9.2bn (R164.39bn) conditional commitment announced in June 2023 for the BlueOval project. Trump and his advisers have been critical of the Biden administration's efforts to incentivise EV production.
“This programme is essential to getting people to choose the US,” said Jigar Shah, who heads the DOE loan programmes office in an interview.
“When you look at the competition we have from China, it is clear they have used low-cost debt for a long time to promote a lot of manufacturing capacity that has hollowed out many communities in Kentucky, Tennessee and other states around the country.”
The joint venture is building battery manufacturing facilities in Kentucky and Tennessee that will enable more than 120GWh hours of US battery production annually.
BlueOval SK said it has invested more than $11bn (R196.55bn) to date in the construction of the three four-million-square-foot facilities and plans to begin production at the first Kentucky plant in 2025 and will be ready to begin production in Tennessee in late 2025.
Asked why it took nearly 18 months to complete the loan, BlueOval SK said the DOE undertook rigorous due diligence that had to conduct technical, market, financial, credit, legal, regulatory and other reviews.
Earlier this month, the DOE said it is planning to loan up to $7.54bn (R134.73bn) to the StarPlus Energy joint venture of Chrysler-parent Stellantis and Samsung SDI to help build two EV lithium-ion battery plants in Indiana.
The conditional commitment award must still be finalised and includes $6.85bn (R122.41bn) in principal and $688m (R12.29bn) in capitalised interest
The DOE said last month it was proposing to loan Rivian up to $6.6bn (R117.93bn) to build a plant in Georgia to begin building smaller, less expensive EVs in 2028.
In December 2022, the DOE finalised a $2.5bn (R44.67bn) low-cost loan to a joint venture of General Motors and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
US finalises $9.63bn loan for Ford, SK On joint battery venture
Biden incentivising EV sector before Trump taking over
Image: Supplied
The US energy department on Monday said it has finalised a $9.63bn (R165.46bn) loan to a joint venture of Ford and South Korean battery maker SK On to help finance construction of three new battery manufacturing plants in Tennessee and Kentucky.
The low-cost government loan for the BlueOval SK joint venture is the largest ever from the government's advanced technology vehicles manufacturing loan programme. SK On is the battery unit of energy group SK Innovation.
The final award — first reported by Reuters — is one of a series of actions by the Biden administration to boost electric vehicle (EV) production before president-elect Donald Trump takes office next month.
The amount is higher than the $9.2bn (R164.39bn) conditional commitment announced in June 2023 for the BlueOval project. Trump and his advisers have been critical of the Biden administration's efforts to incentivise EV production.
“This programme is essential to getting people to choose the US,” said Jigar Shah, who heads the DOE loan programmes office in an interview.
“When you look at the competition we have from China, it is clear they have used low-cost debt for a long time to promote a lot of manufacturing capacity that has hollowed out many communities in Kentucky, Tennessee and other states around the country.”
The joint venture is building battery manufacturing facilities in Kentucky and Tennessee that will enable more than 120GWh hours of US battery production annually.
BlueOval SK said it has invested more than $11bn (R196.55bn) to date in the construction of the three four-million-square-foot facilities and plans to begin production at the first Kentucky plant in 2025 and will be ready to begin production in Tennessee in late 2025.
Asked why it took nearly 18 months to complete the loan, BlueOval SK said the DOE undertook rigorous due diligence that had to conduct technical, market, financial, credit, legal, regulatory and other reviews.
Earlier this month, the DOE said it is planning to loan up to $7.54bn (R134.73bn) to the StarPlus Energy joint venture of Chrysler-parent Stellantis and Samsung SDI to help build two EV lithium-ion battery plants in Indiana.
The conditional commitment award must still be finalised and includes $6.85bn (R122.41bn) in principal and $688m (R12.29bn) in capitalised interest
The DOE said last month it was proposing to loan Rivian up to $6.6bn (R117.93bn) to build a plant in Georgia to begin building smaller, less expensive EVs in 2028.
In December 2022, the DOE finalised a $2.5bn (R44.67bn) low-cost loan to a joint venture of General Motors and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
MORE:
Lamborghini delays first EV launch as market not ready
Tavares says 'amicable' Stellantis exit was due to disagreements on strategy
Volkswagen Group Africa sets 2024 production record
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most read
Latest Videos