The United States government has reaffirmed its commitment to move EV production to its shores instead of relying on foreign entities. The US Department of Energy's Loan Program Office (LPO) has announced a conditional $9.2 billion loan for BlueOval SK (BOSK) — owned by Ford and South Korean battery producer SK On — to build three battery manufacturing plants, Bloomberg reports.
The loan is the biggest the LPO has given out yet — almost four times the size of last year's $2.5 billion loan for Ultium Cell — a joint venture between General Motors and LG. The loan's scale is thanks, in part, to last year's passage of the Inflation Reduction Act, which led to the LPO's lending budget increasing to $400 billion. For context, in the previous 14 years, the LPO has dispersed about $33 billion. The extra capital will certainly be necessary to achieve the Biden-Harris administration goal for EVs to make up half of US car sales by 2030.
There will be two plants in Kentucky and one in Tennessee, with all three producing batteries for Ford and Lincoln's upcoming EV. The car manufacturer also announced plans for a Michigan-based LFP battery plant earlier this year. The production ramp-up comes as Ford aims to roll out two million EVs by 2026, with the All-Electric Explorer, Mustang Mach-E and E-Transit already available and an EV lineup in the works for Lincoln. In comparison, Ford produced about 132,000 EVs in 2022. Ford also recently secured its EV drivers access to 12,000 Tesla's charging points across North America.
The LPO stresses that the loan will also bring career opportunities to the areas, creating 5,000 construction jobs and another 7,500 operation jobs once the plants start running. The investment also aligns with President Biden's Justice40 Initiative that 40 percent of specific federal investments (including LPO loans) go to disadvantaged communities.