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 (NYSE:) 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 Blue Oval 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 (KANSAS:).
The amount is higher than the conditional commitment of $9.2 billion announced in June 2023 and comes just weeks before President-elect Donald Trump takes office. Trump and his advisers have criticized the Biden administration's efforts to incentivize electric vehicle production.
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.
Blue Oval SK said it has invested more than $11 billion to date in 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. at the end of 2025.
Earlier this month, the DOE said it plans to lend up to $7.54 billion to Chrysler parent Stellantis' (NYSE ) StarPlus Energy joint venture. Samsung IDE (KS:) 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 that it proposed lending Rivian (NASDAQ up to $6.6 billion to build a plant in Georgia to begin building smaller, less expensive electric vehicles in 2028.
In December 2022, the DOE finalized a low-cost $2.5 billion loan to a joint venture of General Motors (NYSE and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
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