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Ford and SK On Secure $9.63B Loan to Setup 3 Battery Plants
FFord Motor(F) ZACKS·2024-12-18 15:51

Group 1: Loan and Investment Details - Ford Motor Company and SK On Ltd. secured a 9.63billionloanfromtheU.S.EnergyDepartmenttobuildthreeadvancedEVbatteryplantsinTennesseeandKentucky,markingthelargestloanfromthedepartment′sAdvancedTechnologyVehiclesManufacturingProgram[1]−Theloanamountwasrevisedupwardfromaninitialestimateof9.63 billion loan from the U.S. Energy Department to build three advanced EV battery plants in Tennessee and Kentucky, marking the largest loan from the department's Advanced Technology Vehicles Manufacturing Program [1] - The loan amount was revised upward from an initial estimate of 9.2 billion due to inflation-driven cost increases, with the finalization process requiring extensive due diligence [2] - BlueOval SK has invested over 11billionintheconstructionofitsfacilities,eachcoveringfourmillionsquarefeet,andinworkforcedevelopmentandequipmentinstallation[4]Group2:StrategicImplications−TheEnergyDepartmentviewstheloanasasignificantsteptowardreshoringmanufacturingandreducingrelianceonChinesesupplychains,aligningwiththeBidenadministration′sgoalofachievingzero−emissionvehiclesforhalfofallU.S.vehiclesby2030[3]−ThefirstKentuckyplantisexpectedtobeginproductioninearly2025,followedbytheTennesseeplantlaterthatyear[4]Group3:IndustryContext−TheEnergyDepartmenthasalsoannouncedloanstoothercompanies,includinga11 billion in the construction of its facilities, each covering four million square feet, and in workforce development and equipment installation [4] Group 2: Strategic Implications - The Energy Department views the loan as a significant step toward reshoring manufacturing and reducing reliance on Chinese supply chains, aligning with the Biden administration's goal of achieving zero-emission vehicles for half of all U.S. vehicles by 2030 [3] - The first Kentucky plant is expected to begin production in early 2025, followed by the Tennessee plant later that year [4] Group 3: Industry Context - The Energy Department has also announced loans to other companies, including a 7.54 billion loan to StarPlus Energy for two battery plants and a proposed $6.6 billion loan to Rivian for a Georgia plant [5]