The U.S. Department of Energy said Monday that it has finalized a $9.63 billion loan to a joint venture between Ford Motor and South Korean battery maker SK On (BlueOval SK), which will help finance the construction of three new battery plants. battery manufacturing in Tennessee and Kentucky.
The low-cost government loan for the BlueOval SK joint venture is the largest ever awarded by the government’s advanced technology vehicle manufacturing loan program. SK On is the battery unit of the energy group SK Innovation.
The ending, first reported by Reuters, is one of a series of moves by the Biden administration to boost electric vehicle production before President-elect Donald Trump takes office next month.
The amount is higher than the $9.2 billion conditional commitment announced in June 2023 for the BlueOval project. Trump and his advisers have criticized the Biden administration’s efforts to incentivize electric vehicle production.
“This program is essential for people to choose the United States of America,” Jigar Shah, who heads the Energy Department’s Loan Programs office, said in an interview. “When you look at the competition we have with China, it is very clear to me that they have used low-cost debt for a long time to promote huge 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 produce more than 120 gigawatt hours of batteries in the United States annually.
BlueOval SK said it has invested more than $11 billion to date in the construction of the three 4 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 by end of 2025.
When asked why it took almost 18 months to complete the loan, Blue Oval SK said the DOE conducted 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 lend up to $7.54 billion to the StarPlus Energy joint venture of Chrysler parent Stellantis and Samsung SDI to help build two lithium-ion battery plants for electric vehicles. in Indiana.
The conditional commitment has yet to be finalized and includes $6.85 billion in principal and $688 million in capitalized interest.
The DOE said last month it was proposing to lend Rivian up to $6.6 billion to build a plant in Georgia to begin making smaller, less expensive electric vehicles in 2028.
In December 2022, DOE finalized a $2.5 billion low-cost loan to a joint venture of General and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan .
With information from Reuters.
Follow us on Google News to always stay informed
Follow business information in our specialized section
