According to Reuters, on December 16, the U.S. Department of Energy announced that it has finalized a $9.63 billion loan for BlueOval SK, a joint venture between Ford Motor Company and South Korean battery manufacturer SK On. The loan will support the construction of three new battery manufacturing plants in Tennessee and Kentucky.
This low-interest government loan is the largest ever granted under the U.S. government's Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, Reuters reported.
BlueOval SK is currently building battery factories in Kentucky and Tennessee, with plans to achieve an annual production capacity exceeding 120 GWh in the U.S. The joint venture stated that it has already invested over $11 billion in the three new plants. The first Kentucky plant is scheduled to begin operations in 2025, while the Tennessee facility is expected to start production by late 2025.
Jigar Shah, director of the Department of Energy's Loan Programs Office, emphasized the significance of the project: "This initiative is critical to ensuring Americans choose domestically produced products." When asked why the loan took nearly 18 months to finalize, BlueOval SK explained that the Department of Energy conducted extensive due diligence, including assessments of technology, market viability, finances, credit, legal, and regulatory aspects.
This move is part of a broader effort by the Biden administration to accelerate electric vehicle production ahead of Donald Trump's inauguration as president next month. Earlier this month, the Department of Energy announced plans to provide a loan of up to $7.54 billion to StarPlus Energy, a joint venture between Stellantis and Samsung SDI, for the construction of two EV lithium battery plants in Indiana. This loan includes $6.85 billion in principal and $688 million in capitalized interest but has not yet been finalized.
Additionally, the Department of Energy revealed last month its intention to provide a $6.6 billion loan to EV startup Rivian to support the construction of its Georgia factory, which is expected to begin producing smaller, more affordable EVs in 2028.
In December 2022, the Department of Energy finalized a $2.5 billion low-interest loan for General Motors' joint venture, funding the construction of three new battery plants in Ohio, Tennessee, and Michigan.
