By David Shepardson
WASHINGTON (Reuters) – The U.S. Department of Energy said on Monday it has completed a $9.63 billion loan to a joint venture of Ford Motor (F) and South Korean battery maker SK On to build three new battery factories in Tennessee and help fund 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 program. SK On is the battery unit of energy group SK Innovation.
The final award – 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 been critical of the Biden administration’s efforts to boost electric vehicle production.
“This program is essential to get people choosing the United States of America,” Jigar Shah, head of the DOE Loan Programs office, said in an interview. “If you look at the competition we have from China, it’s very clear to me that for a long time they’ve used cheap debt to promote a lot of manufacturing capacity, which has hollowed out a lot of communities in Kentucky, Tennessee. and other states across the country.”
The joint venture is building battery manufacturing facilities in Kentucky and Tennessee that will enable more than 120 gigawatt hours of U.S. battery production annually.
BlueOval SK said it has invested more than $11 billion to date in building the three 4 million-square-foot facilities and plans to begin production at the first factory in Kentucky in 2025 and be ready by the end of 2025 to begin production in Tennessee. .
When asked why it took nearly 18 months to close the loan, Blue Oval SK said the DOE conducted a rigorous due diligence investigation, which included technical, market, financial, credit, legal, regulatory and other reviews are carried out.
Earlier this month, the DOE said it plans to lend up to $7.54 billion to the StarPlus Energy joint venture of Chrysler parent Stellantis and Samsung SDI to help build two EV lithium-ion battery factories in Indiana.
The conditional award has yet to be finalized and includes $6.85 billion in principal and $688 million in capitalized interest
The DOE said last month that it proposed lending Rivian up to $6.6 billion to build a factory in Georgia that could build smaller, cheaper electric vehicles by 2028.
