DOE finalizes a $9.6 billion loan arrangement for Ford's BlueOval SK battery cooperative project
The Department of Energy (DOE) has announced a significant move towards boosting domestic production of electric vehicles (EVs) and related components. On Thursday, it was revealed that a direct loan of up to $9.63 billion has been granted to Ford Motor Company's electric vehicle battery joint venture, BlueOval SK. This loan, the largest-ever granted by the DOE's Advanced Technology Vehicles Manufacturing Loan Program, is intended to keep the U.S. competitive in the expanding EV global marketplace.
The BlueOval SK joint venture was established with South Korea-based EV battery manufacturer SK On to provide Ford a steady supply of domestically-produced batteries for its EVs. The loan will finance the construction of up to three electric vehicle battery plants in the U.S., two in Kentucky and one in Tennessee. Battery production at these plants is slated to begin in 2025.
Ford is currently hiring production workers for the BlueOval SK battery plants in Kentucky and Tennessee. To support the local communities, BlueOval SK has partnered with Tennessee College of Applied Technology and Elizabethtown Community and Technical College in Kentucky to train local talent for jobs at the new plants.
Interestingly, the company that received the largest loan amount from the DOE Advanced Vehicle Technology Program is not just Ford. Tesla also received a significant loan commitment to contribute to the establishment of electric car battery factories in the USA.
In a separate development, General Motors (GM) also received a DOE loan to build battery manufacturing facilities in the U.S., although the exact loan amount was not specified. In December 2022, Ultium Cells, GM's joint venture with LG Energy Solution, was the first to receive a DOE loan commitment of $2.5 billion to build EV battery plants in Ohio, Tennessee, and Michigan.
GM announced earlier this month it was selling its stake in the Michigan battery plant to its joint venture partner LG, as it works to strategically adjust battery production capacity and control costs as the EV market expands. The battery production for the Mustang Mach-E will move from LG Energy Solution's factory in Poland to its U.S. facility in Michigan in 2025, as part of this agreement.
In October, Ford also announced a separate battery supply deal with LG Energy Solution in Europe. This deal will provide an estimated 109 gigawatt hours of batteries for Ford's commercial EVs, starting in 2026. If the three facilities are built, they would enable over 120 gigawatt hours of battery production annually for Ford.
It's worth noting that the DOE's Loan Program Office provides funding not only for electric vehicle battery manufacturing but also for domestic battery mineral processing and battery recycling initiatives. This holistic approach aims to ensure a sustainable and competitive EV industry in the U.S.
As these developments unfold, it's clear that the U.S. is committed to strengthening its position in the EV market, fostering domestic production, and creating jobs for local communities.
