Dive Brief:
- The Department of Energy announced the closing of a direct loan of up to $9.63 billion to Ford Motor Co.’s electric vehicle battery joint venture BlueOval SK, according to a Dec. 16 press release.
- The funds, which the DOE’s Loan Program Office has been working to finalize since June 2023, will finance the construction of up to three electric vehicle battery plants in the U.S., two in Kentucky and one in Tennessee.
- The loan to BlueOval SK is the largest-ever granted by the DOE’s Advanced Technology Vehicles Manufacturing Loan Program, designed to boost domestic production of electric vehicles and related components to keep the U.S. competitive in the expanding EV global marketplace. The three facilities would enable over 120 gigawatt hours of battery production annually for Ford.
Dive Insight:
The BlueOval SK joint venture with South Korea-based EV battery manufacturer SK On was established to provide Ford a steady supply of domestically-produced batteries for its EVs. Battery production is slated to begin in 2025.
The DOE’s Loan Program Office also provides funding for domestic battery mineral processing and battery recycling initiatives. The loan commitments are available to eligible companies through Sept. 30, 2028.
The three planned joint venture EV battery plants are expected to create over 5,000 construction jobs up to 7,500 operations roles once fully operational. One of the requirements for companies that receive funding through the DOE’s ATVM program is to develop and implement a comprehensive community benefits plan, such as job training for local residents.
To meet this requirement, BlueOval SK has partnered with Tennessee College of Applied Technology and Elizabethtown Community and Technical College in Kentucky to train members of the local communities for jobs at the new plants. Ford is currently hiring production workers for the BlueOval SK battery plants in Kentucky and Tennessee.
In October, Ford also announced a separate battery supply deal with LG Energy Solution in Europe. The company will supply Ford with an estimated 109 gigawatt hours of batteries for its commercial EVs beginning in 2026 as part of a supply contract ranging from four to six years. As part of the agreement, battery production for the Mustang Mach-E will move from LG Energy Solution’s factory in Poland to its U.S. facility in Michigan in 2025.
In addition to Ford, General Motors also received a DOE loan to build battery manufacturing facilities in the U.S.
In December 2022, Ultium Cells, GM’s joint venture with LG Energy Solution, was the first to receive a DOE loan commitment of $2.5 billion to build EV battery plants in Ohio, Tennessee and Michigan. However, GM announced earlier this month it was selling its stake in the Michigan battery plant to its joint venture partner LG as it works to strategically adjust battery production capacity and control costs as the EV market expands.
