The U.S. Energy Department announced Dec. 16 the finalization of a $9.63 billion loan to BlueOval SK, a joint venture between Ford Motor Co. and South Korea’s SK On, marking the largest loan ever issued through the Advanced Technology Vehicles Manufacturing program. The funds will support the construction of three massive battery manufacturing facilities in Kentucky and Tennessee.
The finalized amount is higher than the $9.2 billion conditional commitment announced in June 2023 for the BlueOval project.
The BlueOval SK joint venture aims to produce over 120 gigawatt-hours of battery capacity annually once operations commence, with the first Kentucky plant set to begin production in 2025 and the Tennessee facility following later that year. These facilities represent more than $11 billion in investments and underscore the Biden administration's push to strengthen domestic EV production.
“This program is essential to getting people to choose the United States of America,” said Jigar Shah, director of the DOE Loan Programs Office. Shah emphasized the importance of low-cost loans in competing with manufacturing powerhouses like China, which has long leveraged similar strategies to dominate the EV market.
The loan underwent a rigorous 18-month review process by the DOE after the initial announcement in June 2023, which assessed the technical, market, financial and regulatory aspects of the project before final approval.
BlueOval SK’s facilities span 4 million square feet each, and their completion is expected to drive significant economic growth in the Kentucky and Tennessee regions, where the hollowing out of manufacturing industries has been a long-standing concern.
This announcement follows a string of major DOE loans designed to spur domestic EV manufacturing. Earlier this month, the DOE revealed plans for a $7.54 billion loan to the StarPlus Energy joint venture of Stellantis and Samsung SDI for two battery plants in Indiana. Similarly, in December 2022, the DOE finalized a $2.5 billion loan to a General Motors-LG Energy Solution joint venture for three lithium-ion battery factories.
