Ford, the prominent American automotive giant, has recently been granted a record-breaking $9.2 billion loan from the U.S. Department of Energy (DOE). The loan, the largest ever dispensed by the department, is aimed at supporting the construction of three new electric vehicle (EV) battery manufacturing plants.The United States government has firmly reiterated its resolution to bring the production of electric vehicles to its homeland instead of relying on foreign entities. This historic move is demonstrated through the DOE’s Loan Program Office (LPO) offering a conditional $9.2 billion loan to BlueOval SK (BOSK), a joint venture between Ford and South Korean battery producer SK On.
The loan is the largest ever made by the LPO and is about four times larger than the LPO’s previous record loan of $2.5 billion to Ultium Cells, a joint venture between General Motors and LG, which was made last year. The Inflation Reduction Act, which was passed not long before the loan was made, raised the LPO’s lending budget to an unprecedented $400 billion.
The loan will be used to build three battery manufacturing plants. Two of these will be located in Kentucky, while the third will be in Tennessee. All these plants will produce batteries for upcoming EVs from Ford and Lincoln.
The Department of Energy’s massive loan signals a broader governmental effort to boost EV manufacturing in the United States. This move is critical in the race against China, which currently controls nearly 75% of global battery production.
Furthermore, it aligns with the White House’s plan to promote clean energy and combat climate change. Increasing EV sales is an effective strategy to reduce tailpipe emissions, which account for roughly a third of all greenhouse gases and significantly contribute to climate change.
Ford’s plans for the loan are ambitious. The automaker has announced that it aims to roll out two million EVs by 2026. This would be a significant increase from the 132,000 EVs it produced in 2022.
Ford’s plans for EV production are not limited to its namesake brand. The automaker has also announced plans for an electric vehicle lineup for its luxury brand, Lincoln. In addition, Ford has secured access to 12,000 Tesla charging points across North America for its EV drivers.
The LPO loan is projected to significantly increase employment prospects in the communities where the factories are situated. Once the plants are up and running, it is expected to provide permanent employment for 7,500 people in addition to the 5,000 jobs created during construction.
The investment also aligns with President Biden’s Justice40 Initiative. This initiative mandates that 40% of specific federal investments, including LPO loans, be directed towards disadvantaged communities.
The historic $9.2 billion loan from the Department of Energy to Ford represents a significant step forward in the United States’ commitment to promoting EV production and combatting climate change. The loan will not only support the construction of three new EV battery manufacturing plants, but it will also bring significant employment opportunities and align with initiatives to support disadvantaged communities. The future of EV production in the U.S. looks bright, and it will be exciting to see how this investment shapes the industry in the years to come.
First reported on engadget.