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Ford accepts a $9.2 billion US federal loan

As part of President Joe Biden’s initiative to bring more production of electric vehicles to the United States, Ford and its South Korean battery manufacturing partner SK On have agreed to a loan from the US Department of Energy in the amount of $9.2 billion.

BlueOval SK, a partnership between Ford and SK, would utilize the money to construct three battery factories in the states of Kentucky and Tennessee for use in electric vehicles.

As of 2021, Ford had already stated its intention to establish electric vehicle and battery manufacturing facilities in the two states. The businesses originally estimated they would spend $11.4 billion on the endeavor. If finished, Ford claims it will be the largest investment in manufacturing it has undertaken since its founding in 1903. In addition to the three battery plants, an electric truck assembly plant will be located there.

Ford must fulfill additional requirements before receiving the loan proceeds. Neither Ford nor the Energy Department provided information about those requirements. Ford could use less than the maximum borrowing amount of $9.2 billion.

The Department of Energy estimates that 7,500 people will be employed at the three plants after 5,000 people are employed during the building phase. DoE’s Advanced Technology Vehicles Manufacturing Loan Program is a $25 billion initiative to lessen America’s reliance on foreign energy and cut down on greenhouse gas emissions, of which this loan would be a part.

If the full Ford loan were to be taken, it would greatly exceed the $8 billion that has been loaned under the program since it was launched in 2007.

In 2009, Ford borrowed $5.9 billion from the program. According to the DoE, that loan was repaid in full as of last year. Last year, GM accepted a $2.5 billion loan from the program.

This loan is part of President Biden’s plan to double EV sales in the United States by 2030.

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