U.S. Energy Department Finalizes Historic Loan

In a landmark move, the U.S. Energy Department has finalized a $9.63 billion loan to the Blue Oval SK joint venture, a partnership between Ford Motor and South Korean battery maker SK On. This funding will support the construction of three new battery manufacturing plants in Tennessee and Kentucky.

Largest Loan in Advanced Technology Vehicles Manufacturing Program

The loan is the largest ever granted under the government's Advanced Technology Vehicles Manufacturing loan program. SK On, the battery unit of energy group SK Innovation, is a key player in this venture. The finalized amount surpasses the $9.2 billion conditional commitment announced in June 2023, coming just before President-elect Donald Trump's inauguration.

Expansion Plans and Future Production

The joint venture is constructing facilities that will enable over 120 gigawatt hours of U.S. battery production annually. Blue Oval SK has already invested more than $11 billion in building these massive 4-million-square-foot facilities. Production at the first Kentucky plant is slated to begin in 2025, with Tennessee operations following in late 2025.

Additional Loan Commitments

In related news, the DOE has also announced plans to loan up to $7.54 billion to the StarPlus Energy joint venture of Chrysler-parent Stellantis and Samsung SDI for two EV lithium-ion battery plants in Indiana. Additionally, a proposed $6.6 billion loan to Rivian for a Georgia plant aims to start building smaller, more affordable EVs by 2028. In December 2022, a $2.5 billion loan was finalized for General Motors and LG Energy Solution's joint venture to establish three new lithium-ion battery cell manufacturing facilities across Ohio, Tennessee, and Michigan.