DOE To Loan Ford, SK On Up To US$9.63 Billion For EV Battery Manufacturing

 

The US Department of Energy’s (DOE’s) Loan Programs Office (LPO) announced the closing of a direct loan of up to US$9.63 billion to BlueOval SK LLC (BOSK) for the construction of up to three manufacturing plants to produce batteries for Ford Motor Company’s future Ford and Lincoln electric vehicles (EVs). BOSK is a joint venture between Ford and Korean battery maker, SK On. BOSK was created to supply Ford with batteries for its growing EV product line. Together, the plants, one located in Tennessee and two in Kentucky, would enable more than 120 GWh of US battery production annually. The three facilities created more than 5000 construction jobs as the plants were being built and will create up to 7500 BOSK operations jobs. The announcement marks the largest loan granted through DOE’s Advanced Technology Vehicles Manufacturing Program (ATVM). According to the DOE, the loan will help ensure the United States can meet domestic demand and remain a global leader in the rapidly expanding EV industry.

The announcement reinforces President Biden’s efforts to onshore and re-shore domestic manufacturing and ensure American businesses remain global leaders in technologies of the future. According to the DOE, expanding domestic production of American-made batteries is critical to reducing America’s reliance on adversarial foreign nations like China, meeting the nation’s domestic and international climate commitments, and achieving President Biden’s goal to make half of all new vehicles sold in 2030 zero-emissions vehicles.

LPO borrowers are required to develop and ultimately implement a comprehensive community benefits plan (CBP). As a part of their CBP, BlueOval SK has partnered with Tennessee College of Applied Technology through the state of Tennessee and Elizabethtown Community and Technical College in the state of Kentucky to construct new community and technical colleges that are training members of the community for quality jobs at the BOSK facilities.

The announcement is one of several recent LPO loans under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program in the last year. Other recent announcements include a US$6.6 billion loan to Rivian and a US$7.54 billion loan for Stellantis and Samsung SDI.

Through ATVM, LPO provides loans to projects related to fuel-efficient vehicles and eligible component manufacturing in the United States. Recent announcements have spanned the critical mineral and battery supply chains and involved mineral processing, battery manufacturing, and battery recycling. LPO has been working with BOSK to finalize its loan since June 2023.

Across all LPO’s programs, DOE has attracted 212 applications for projects across the country totaling over US$324.3 billion in requested loans and loan guarantees, as of November 2024.