Ford Supercharges EV Ambition with $9.2Bn Loan

In a move that set Ford Motor’s stock on the upswing, the U.S. government recently committed billions to aid the Detroit-based car manufacturer in its shift to electric vehicles. The U.S. Energy Department revealed a conditional loan of $9.2 billion for BlueOval SK LLC, a battery manufacturing joint venture between Ford and South Korea’s SK On, an offshoot of SK Innovation.

This venture is at the forefront of constructing one factory in Tennessee and two in Kentucky, all dedicated to the production of electric vehicle (EV) batteries for Ford. Once operational, these plants aim to generate a whopping 120 gigawatt hours of EV batteries per year. This hefty output could power up to 1.5 million new EVs annually. Considering a single battery factory could cost up to $3 billion, the loan significantly bolsters Ford’s investment plan.

The company’s stock saw an uptick in response to the news, with shares gaining about a quarter following the announcement.

“Ford welcomes the Department of Energy’s support for BlueOval SK’s EV battery production,” stated Ford Treasurer Dave Webb. “It’s going to help make great EVs available to more customers while powering thousands of good paying jobs and American manufacturing.”

This loan is part of the Advanced Technology Vehicles Manufacturing Loan Program, authorized by the Energy Independence and Security Act of 2007. To date, this program has loaned about $8 billion, making the loan to BlueOval the largest yet.

Indeed, EVs are no longer niche but are becoming a mainstay in the automotive world. They accounted for about 7.5% of all new car sales in the U.S. in the first quarter. Ford, having restructured itself in 2022, is now all-in with its electric transformation, with plans to reach a global “run-rate” of 2 million EVs annually by 2026.

This massive government loan is sure to accelerate Ford’s journey into the future of green transportation.

Photo courtesy of Ford.