The US Department of Energy (DOE) has conditionally committed to a $9.2bn loan to a joint venture of Ford and Korean conglomerate, SK On, to build three battery factories, one in Tennessee and two in Kentucky.
Together, the plants will produce some 120 gigawatt hours worth of battery capacity a year, displacing around 455 million gallons of gasoline.
Building the plants will create 5,000 construction jobs in the two states and 7,500 permanent jobs once the plants are up and running.
The joint venture, called BlueOval SK, or Bosk, wants the batteries for Ford’s future Ford and Lincoln electric vehicles (EVs).
“This effort supports President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing of technologies that are critical to reaching the clean energy and transportation future,” said the DOE’s Loan Programs Office.
“Expanding domestic production of American-made batteries is critical to reaching the Biden-Harris Administration’s goals to have EVs represent at least 50% of all new car sales in the US by 2030, reach net-zero electricity by 2035, and a net-zero economy by 2050,” it added.
Bosk is presently building Blue Oval City, an EV assembly complex near Stanton, Tennessee. This is expected to be operational in 2025.
Altogether, Bosk aims to make 1.2 million electric vehicles a year.
An SK spokesperson described the loan as “the largest-ever financial support for battery manufacturing”.
The company, the second largest South Korean “chaebol” after Samsung, has raised some $19.8bn in investment funds since July 2022.
The low-interest credit facility is part of the government’s Advanced Technology Vehicle Manufacturing programme, which began in 2007 and is intended to nurture the advanced automobile industry in the US.
Bosk applied for the loan in January, after its Tennessee factory passed an environmental impact test carried out by the Department of Energy.
The loan may be formally approved as early as the end of this year.