Legacy automaker Ford has recently announced a major milestone in its electrification journey. The company’s BlueOval SK joint venture with South Korean battery maker SK On has successfully secured a substantial $9.2 billion loan from the US government.
With this significant financial backing, Ford aims to bolster its position in the rapidly evolving EV market and make substantial strides toward its commitment to sustainable transportation.
Loan agreement details
The US Department of Energy Loan Programs Office awarded a conditional loan of up to $9.2 billion for BlueOval SK to develop its three EV battery factories: one in Tennesee and two in Kentucky.
As mentioned, this loan is “conditional.” Therefore, BlueOval SK must still adhere to certain standards before accessing the funds. Unfortunately, neither the JV nor the DOE disclosed the conditions.
Nonetheless, this loan marks one of the biggest grants to a car company since the 2009 financial crisis, per Bloomberg.
The substantial fund will aid Ford in its production target of reaching 2 million EV units by 2026.
In addition, BlueOval SK’s three battery factories will generate about 5,000 construction jobs in Tennessee and Kentucky. It will also create 7,500 operations jobs once the plants become fully operational.
“We’re thrilled the Department of Energy joins BlueOval SK in our vision to electrify the future of mobility. BlueOval SK will use this loan to its fullest as we create 7,500 good American jobs, strengthen critical domestic supply chains, and produce high-quality batteries for future Ford and Lincoln electric vehicles here in Tennessee and Kentucky.”
BlueOval SK CEO Robert Rhee
Apart from that, the three battery factories will have an annual capacity of over 120 gigawatt-hours, sufficient to beat 455 million gallons of gasoline annually.
“This effort supports President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing of technologies that are critical to reaching the clean energy and transportation future. Expanding domestic production of American-made batteries is critical to reaching the Biden-Harris Administration’s goals to have EVs represent at least 50% of all new car sales in the US by 2030, reach net-zero electricity by 2035 and a net-zero economy by 2050.”
Jigar Shah, Loans Program Office director
See Also:
- Ford begins construction at Blue Oval SK EV Battery Park in Kentucky
- Ford EVs to have access to Tesla Superchargers in 2024
- Ford plans to produce its next-gen electric truck at the $5.6B factory in 2025
- Ford’s $5.6 billion epicenter for EVs is now being built
- Ford drops SK and teams up with LG on the Turkey battery plant
This substantial loan is aligned with President Biden’s efforts to accelerate EV adoption in the US, aiming to achieve a target of 50% of new vehicle sales being EVs by 2030.
Indeed, government support for such EV battery production projects plays a vital role in driving innovation, facilitating market growth, and promoting sustainable transportation.
