The U.S. Department of Energy finalized a $9.63 billion loan for Ford Motor Co. and South Korea’s SK On to help finance the construction of three new EV battery plants in Tennessee and Kentucky.
Ford and SK ON finalized a $9.63 billion loan with the U.S. Department of Energy to build three battery production plants.
The plants comprise the BlueOval SK joint venture that are part of the automaker’s massive BlueOval complex in Tennessee and the additional plant in Kentucky that are spearheading the company’s electric vehicle efforts.
The loan comes from the federal government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program. The program, which has been around since 2008, has been used by a variety of automakers in the past, but hasn’t been used for big loans like this one until recently.
Bigger money
Ford and SK ON’s is the largest loan to date from the program. In fact, the original project was only slated for $9.2 billion when announced in June 2023. With the change in political parties in the White House, the number of projects getting loans finalized in the last 60 days of the Biden administration seems to be on the rise.
While Ford has scaled back its EV production in the short term, it’s still moving ahead on its BlueOval SK plants in Kentucky and Tennessee.
At the end of November, EV maker Rivian secured a $6.6 billion loan from the same fund to build its second plant just north of Atlanta. The company, which plans to begin production of vehicles at the site in 2028, received a conditional commitment from the Dept. of Energy to fund the loan, which includes $6 billion in principal and $600 million in interest.
The DOE and the company must satisfy certain technical, legal, environmental, and financial conditions before the Department of Energy enters into definitive financing documents and funds the loan.
Several more, in smaller amounts, are expected to close in the days ahead, despite criticisms from the incoming Trump administration.
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Ford’s big investment
Rivian just recently finalized a $6.6 billion loan throught the DOE’s advanced vehicle loan program.
Overall, the Michigan-based automaker plans to spend more than $11 billion on the project. 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. The first of three 4 million square-foot plants will begin production in Kentucky late next year.
In addition to those two loans, the DOE is expected to loan 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 plants in Indiana.
In December 2022, the DOE finalized a $2.5 billion 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.
I hope the plant is flexible enough to produce 5.0 liter V8s.
Sigh, Jim, EV sales continue to grow and, with battery prices plunging, you may found yourself in left field. Even without EVs, demand for 5.0-liter — and other V-8s — has tumbled.