Ford and its South Korean battery manufacturing partner SK On have agreed to a loan of $9.2 billion from the US Department of Energy as part of President Joe Biden’s push to bring more electric vehicle production to the United States.
Ford and SK’s joint venture, BlueOval SK, would use the funds to build three electric vehicle battery plants, two in Kentucky and one in Tennessee.
Ford announced in 2021 that it would build electric vehicle and battery factories in the two states. At the time, the companies said they would invest a total of $11.4 billion in the project. If completed, it would be the largest single manufacturing investment Ford has ever made since the company’s founding in 1903, according to the auto giant. Besides the three battery plants, the site will also include a factory to build electric trucks.
The loan is conditional, meaning Ford still must meet certain requirements before gaining access to the funds. Neither Ford nor the Department of Energy detailed those conditions. Also, the loan amount is up to $9.2 billion, but Ford could use less than that.
The loan funds will support 5,000 construction jobs in the two states and, ultimately, 7,500 staff positions at the three plants, according to the DoE. The loan would be part of the DoE’s Advanced Technology Vehicles Manufacturing Loan Program, a $25 billion program to reduce US dependence on oil and reduce carbon emissions.
The Ford loan, if taken in full, would be significantly larger than the total of $8 billion that has been lent under the program since it was authorized in 2007.
Ford previously took out a $5.9 billion loan under the program in 2009. That loan was fully repaid as of last year, according to the DoE. General Motors agreed to a $2.5 billion loan under the program last year.
The loan is part of Biden’s bid to increase sales of EVs in the United States to reach 50% of new vehicle sales by 2030, CNN reports.
