The US Department of Energy (DOE) is set to grant a Ford joint venture (JV) a loan of $9.2bn for the development of battery plants in the states of Tennessee and Kentucky. South Korean battery maker SK On will join Ford in the $11.4bn venture.
The Inflation Reduction Act (IRA), which offers financial incentives for clean technology developments within the US, has enabled the DOE’s Loan Programmes Office to grant more loans.
The $9.2bn loan will be the largest single investment from the office since it was established 20 years ago. The funding comes as part of a governmental push to increase US competitiveness in green technology innovation through the IRA.
The Tennessee and Kentucky manufacturing plants will represent the largest ever US investment in electric vehicles (EVs) by an automotive manufacturer at any one time, according to Ford.
The JV, called BlueOval SK, was finalised in 2022 and incorporates both battery plants. According to Ford, the battery plants will enable 129 gigawatt-hours a year of production capacity.
BlueOval SK must meet a number of conditions from the Loan Programmes Office before receiving the “conditional commitment” loan, although these are not yet outlined. Ford is investing $7bn into the BlueOval SK projects while SK is investing $4.4bn.
The Loan Programmes Office also granted a $2.5bn loan last year to a JV between General Motors and LG Energy Solutions for battery production.
Investment into EV and battery manufacturing in the US is growing, mainly due to the IRA stipulations, which require manufacturing to take place domestically to receive tax incentives.
The Biden administration has committed to a goal of 50% of all new vehicles being electric by 2030. According to the White House, EV sales have tripled and available charging ports have increased by 40% since Biden took office.
