Key Highlights:
- The U.S. Department of Energy has finalized a direct loan of up to $9.63 billion to Ford’s electric vehicle battery project, BlueOval SK.
- This funding will support the building of three new EV battery plants in the U.S., with two located in Kentucky and one in Tennessee.
- This loan is the largest awarded by the Department’s Advanced Technology Vehicles Manufacturing Loan Program, which aims to enhance domestic production of electric vehicles and their components. The new facilities are expected to produce more than 120 GWh of batteries each year for Ford.
Insights:
BlueOval SK, a partnership with South Korea’s SK On, is designed to ensure Ford has a reliable supply of locally made batteries for its electric vehicles. Production at these plants is expected to start in 2025.
The Department of Energy’s Loan Programs Office also funds domestic battery mineral processing and recycling projects, with financial commitments open to eligible companies until September 30, 2028.
The three battery plants are projected to create over 5,000 construction jobs and around 7,500 operational jobs once they are up and running. Recipients of the DOE funding are required to develop community benefits plans, which include job training for local residents.
To fulfill this requirement, BlueOval SK has teamed up with the Tennessee College of Applied Technology and Elizabethtown Community and Technical College in Kentucky to provide training for community members for roles at the new facilities. Ford is actively looking for production workers for these battery plants in both Kentucky and Tennessee.
In October, Ford also announced a new deal with LG Energy Solution for battery supplies in Europe. This agreement is set to offer Ford around 109 GWh of batteries for its commercial electric vehicles starting in 2026, with production for the Mustang Mach-E shifting to Michigan from Poland in 2025.
General Motors is also working with the Department of Energy, having received funding for its own battery manufacturing facilities in the U.S. In December 2022, GM and LG Energy Solution’s Ultium Cells received a $2.5 billion loan commitment for plants in Ohio, Tennessee, and Michigan. Recently, GM announced it would sell its stake in the Michigan plant to LG as part of a strategy to realign its production capacity in the growing EV market.