U.S. gov’t OKs US$9.63 bln loan to SK On-Ford U.S. venture

The U.S. government said Monday it has given final approval for a US$9.63 billion loan to BlueOval SK LLC, a joint venture between South Korean battery firm SK On and Ford Motor Co., helping them push ahead with a project to build three battery plants in America.

In June last year, the joint company obtained preliminary approval from the Department of Energy (DOE) for the low-cost loan under the Advanced Technology Vehicles Manufacturing (ATVM) program.

“The largest loan granted through DOE’s ATVM will help ensure the U.S. can meet domestic demand and remain a global leader in the rapidly expanding electric vehicle (EV) industry,” the department said in a statement.

SK On and Ford are building two EV battery plants in Kentucky and a third one in Tennessee as part of their $11.4 billion venture, formed in 2021.

Batteries built in the three plants will power Ford Motor’s future Ford and Lincoln EV models, the statement said.

SK On is a car battery unit of South Korea’s second-largest conglomerate, SK Group.

The three plants, once operational, will have an annual production capacity of 129 gigawatt hours, equivalent to powering about 1.2 million EVs. The factories will go into commercial operation in phases starting in 2025.

The ATVM is a direct loan program designed to support the manufacturing of fuel-efficient vehicles and domestic manufacturing by automakers.