Ford’s joint venture to build vehicle batteries with South Korean company SK On just received a $9.2 billion boost from the U.S. Energy Department.
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The low-cost loan comes from the government's Advanced Technology Vehicles Manufacturing (ATVM) program and will assist the collaboration in building three new battery plants in Tennessee and Kentucky capable of collectively producing more than 120 gigawatt hours annually, the Department of Energy said.
The ATVM program has now given out six loans for battery supply chain projects. In September 2009, Ford was awarded a $5.9 billion low-cost government loan from the same program and completed its payments last year, after deferring some in 2020.
The joint project is expected to create 5,000 construction jobs in Tennessee and Kentucky, and 7,500 new jobs once the plants become operational.
Meanwhile, the $430 billion Inflation Reduction Act approved in August also creates a new $45-per-kilowatt battery production tax credit.
In October, Ford CEO Jim Farley said that from 2023 to 2026, "we estimate a combined available tax credit for Ford and our battery partners could total more than $7 billion."
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Last year, the department awarded a joint venture of General Motors and LG Energy Solution $2.5 billion to help finance construction of new lithium-ion battery cell manufacturing facilities.
The loan to Ultium Cells LLC is for facilities in Ohio, Tennessee and Michigan.
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Reuters contributed to this report.
