The United States Department of Energy (DOE) has finalized a record-breaking $9.63 billion low-cost loan to BlueOval SK, a joint venture between Ford Motor Company and South Korean battery maker SK On. This landmark deal aims to finance the construction of three state-of-the-art battery manufacturing plants in Tennessee and Kentucky, bolstering the U.S. electric vehicle (EV) supply chain.
The finalized amount surpasses the $9.2 billion conditional commitment announced in June 2023, marking the largest loan ever issued by the Advanced Technology Vehicles Manufacturing (ATVM) program. BlueOval SK’s ambitious project seeks to enable annual production of over 120 gigawatt hours of battery capacity, a significant boost for the U.S. EV sector.
The facilities, representing an $11 billion investment, are expected to transform EV manufacturing in the U.S. Production at the first Kentucky plant is scheduled to commence in 2025, with the Tennessee facility following later that year. Each site, spanning four million square feet, is designed to ensure scalability and sustainability.
Jigar Shah, head of the DOE’s Loan Programs Office, highlighted the importance of this initiative. “This program is essential to getting people to choose the United States of America. When you look at the competition from China, it’s clear that we need to counter their low-cost debt strategy with strong domestic investments,” Shah stated.
The announcement comes just weeks before President-elect Donald Trump assumes office. Trump’s advisors have been critical of the Biden administration’s focus on incentivizing EV production, a key strategy in reducing carbon emissions and securing U.S. leadership in the green economy.
BlueOval SK attributed the lengthy 18-month loan finalization process to rigorous DOE due diligence, which included extensive technical, market, financial, and regulatory reviews.
The DOE’s commitment reflects a broader effort to accelerate domestic EV infrastructure. Earlier this month, the DOE proposed loans of $7.54 billion for the StarPlus Energy joint venture between Stellantis and Samsung SDI to build two EV battery plants in Indiana. It has also offered $6.6 billion to Rivian for a Georgia-based plant and previously loaned $2.5 billion to General Motors and LG Energy Solution for battery facilities in Ohio, Tennessee, and Michigan.
These initiatives underscore the government’s intent to strengthen U.S. manufacturing, reduce reliance on imports, and establish a competitive edge in the global EV market.
The BlueOval SK project is expected to create thousands of jobs while cementing Kentucky and Tennessee as pivotal hubs in America’s electrified future.
