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By David Shepardson
WASHINGTON (Reuters) -The U.S. Department of Energy said on Monday it has finalized a $9.63 billion loan to a joint venture of Ford Motor (F) and South Korean battery maker SK On to help finance construction of three new battery manufacturing plants in Tennessee and Kentucky. .
The low-cost government loan for the BlueOval SK joint venture is the largest ever awarded by the government’s Advanced Technology Vehicle Manufacturing loan program. SK On is the battery unit of the energy group SK Innovation.
The final award, first reported by Reuters, is one of a series of actions by the Biden administration to boost electric vehicle production before President-elect Donald Trump takes office next month.
The amount is higher than the conditional commitment of $9.2 billion announced in June 2023 for the BlueOval project. Trump and his advisers have criticized the Biden administration’s efforts to incentivize electric vehicle production.
“This program is essential to getting people to choose the United States of America,” Jigar Shah, director of the DOE’s Loan Programs office, said in an interview. “When you look at the competition we have from China, it’s very clear to me that they have used low-cost debt for a long time to promote huge manufacturing capacity that has hollowed out many communities in Kentucky, Tennessee, and other states around the country.”
The joint venture is building battery manufacturing facilities in Kentucky and Tennessee that will produce more than 120 gigawatt hours of batteries in the United States annually.
BlueOval SK said it has invested more than $11 billion to date in the construction of the three 4 million square foot facilities and plans to begin production at the first Kentucky plant in 2025 and will be ready to begin production in Tennessee by end of 2025. .
When asked why it took almost 18 months to complete the loan, Blue Oval SK said the DOE conducted rigorous due diligence that had to conduct technical, market, financial, credit, legal, regulatory and other reviews.
Earlier this month, the DOE said it plans to lend up to $7.54 billion to the StarPlus Energy joint venture of Chrysler parent Stellantis and Samsung SDI to help build two lithium-ion battery plants for electric vehicles in Indiana. .
The conditional commitment award has yet to be finalized and includes $6.85 billion in principal and $688 million in capitalized interest.
The DOE said last month it proposed lending Rivian up to $6.6 billion to build a plant in Georgia to begin building smaller, less expensive electric vehicles in 2028.
