Kentucky Gov. Andy Beshear speaks throughout the official announcement in 2021 of two electrical battery factories in Glendale, Ky. (AP)
WASHINGTON — The U.S. Vitality Division plans to lend as much as $9.2 billion to a three way partnership of Ford Motor and South Korea’s SK On to assist it construct three battery vegetation in Tennessee and Kentucky.
The conditional dedication for the low-cost authorities mortgage for the BlueOval SK three way partnership comes from the federal government’s Superior Expertise Automobiles Manufacturing (ATVM) mortgage program.
SK is a unit of South Korea’s SK Innovation. The three way partnership is constructing three battery manufacturing services in Kentucky and Tennessee able to collectively producing greater than 120 gigawatt hours yearly, the Vitality Division mentioned.
Jigar Shah, head of the Vitality Division’s Mortgage Applications Workplace, mentioned in an interview its objective “is to have individuals select to place these provide chains right here in america, not in different nations, and to do them sooner and extra confidently right here.”
That is the sixth mortgage for battery provide chain tasks from the ATVM program.
The vegetation will displace greater than 455 million gallons of gasoline per yr for the lifetime of the automobiles powered by the batteries they manufacture. The mission is predicted to create 5,000 development jobs in Tennessee and Kentucky, and seven,500 operations jobs as soon as the vegetation are up and working.
“Main know-how transitions have all the time been accelerated by collaboration between the private and non-private sectors,” mentioned Ford Treasurer Dave Webb.
BlueOval SK CEO Robert Rhee mentioned the mortgage can be used to “strengthen important home provide chains, and produce high-quality batteries for future Ford and Lincoln electric vehicles.”
The $430 billion Inflation Discount Act authorized in August additionally creates a brand new $45 per kilowatt battery manufacturing tax credit score. Ford CEO Jim Farley mentioned in October that from 2023 to 2026, “we estimate a mixed obtainable tax credit score for Ford and our battery companions might complete greater than $7 billion.”
The mortgage will fund two battery tasks in Republican-leaning states. Many Republicans in Congress have criticized the Biden administration’s efforts to spice up EV and battery manufacturing.
Final yr, the division awarded a three way partnership of General Motors and LG Vitality Answer $2.5 billion to assist finance development of recent lithium-ion battery cell manufacturing services. The mortgage to Ultium Cells LLC is for services in Ohio, Tennessee, and Michigan.
In September 2009, Ford was awarded a $5.9 billion low-cost authorities mortgage from the identical program, an necessary supply of liquidity within the aftermath of the worldwide monetary disaster. It accomplished its funds final yr, after deferring some in 2020.
Ford introduced in February a separate deal to spend $3.5 billion to make use of know-how from Chinese language battery firm CATL to construct a battery plant in Michigan. That plan has confronted criticism from some Republicans.
Tesla acquired a $465 million mortgage in 2010 from this system that allowed it to open a plant in Fremont, California, and construct the Mannequin S electric car. It repaid the mortgage in 2013.
