WASHINGTON (Reuters) – The U.S. Energy Department on Monday said it has finalized a $9.63 billion loan to a joint venture of Ford Motor (F) and South Korean battery maker SK On to help finance construction of three new battery manufacturing plants in Tennessee and Kentucky.
The low-cost government loan for the Blue Oval 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 amount is higher than the $9.2 billion conditional commitment announced in June 2023 and comes just weeks before President-elect Donald Trump takes office. Trump and his advisers have been critical of the Biden administration’s efforts to incentivize EV production.
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.
Blue Oval 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 in late 2025.
Earlier this month, DOE said it is planning to loan up to $7.54 billion to the StarPlus Energy joint venture of Chrysler-parent Stellantis (STLA) and Samsung SDI to help build two EV lithium-ion battery plants in Indiana.
The conditional commitment award must still be finalized and includes $6.85 billion in principal and $688 million in capitalized interest
DOE said last month it was proposing to loan Rivian (RIVN) up to $6.6 billion to build a plant in Georgia to begin building smaller, less expensive EVs in 2028.
In December 2022, 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.
(Reporting by David Shepardson; Editing by Mark Potter)
