US finalizes $9.63 billion loan for Ford, SK on joint battery venture

WASHINGTON, (Reuters) – The United States Department of Energy announced on Monday that it has finalized a $9.63 billion loan for a Ford Motor joint venture.F:) and South Korean battery maker SK On to finance 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 from the government’s Advanced Technology Vehicles Manufacturing loan program. SK On is the battery unit of the SK Innovation energy group.

The amount comes on top of a $9.2 billion pledge announced in June 2023 and comes just weeks before President-elect Donald Trump takes office.Trump and his advisers have been critical of the Biden administration’s efforts to encourage EV production.

The joint venture is building battery manufacturing facilities in Kentucky and Tennessee that will enable more than 120 gigawatt hours of US battery production per year.

Blue Oval SK said it has invested more than $11 billion to date in the construction of three 4 million square foot facilities and plans to start production at the first Kentucky plant in 2025 and will be ready to start production in Tennessee in late 2025.

Earlier this month, the DOE said it was preparing to provide up to $7.54 billion in loans to Chrysler parent Stellantis’ StarPlus Energy joint venture.STLA:) and Samsung SDI to help build two EV lithium-ion battery plants in Indiana.

The contingent liability 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 was recommending a loan to Rivian (RIVN:) up to $6.6 billion to build a factory in Georgia to begin building smaller, cheaper EVs in 2028.

In December 2022, the DOE finalized a $2.5 billion soft loan to a joint venture between General Motors and LG Energy Solutions to help pay for three new lithium-ion battery manufacturing facilities in Ohio, Tennessee and Michigan.

(Reporting by David Shepardson; Editing by Mark Potter)