SK On Secures $9.6B Loan for US Battery Plants, Boosting EV Production Capacity

BlueOval SK

South Korean battery manufacturer SK On has successfully secured a loan of up to $9.6 billion for the construction of three new battery plants in the United States. The plants, located in Tennessee and Kentucky, will have a combined production capacity of 120 GWh per year, primarily dedicated to supplying batteries for Ford Motor's electric vehicles (EVs), including models under the Ford and Lincoln brands.

Major Investment in EV Battery Production

This loan, the largest ever awarded under the U.S. Department of Energy’s (DOE) Advanced Technology Vehicles Manufacturing Program, is a significant step towards bolstering the country’s position in the rapidly expanding electric vehicle (EV) market. The funds will be used to develop three state-of-the-art battery production facilities, which are set to contribute to Ford’s ambitious EV production goals.

The collaboration between SK On and Ford Motor has already led to the formation of BlueOval SK, a joint venture designed to build the largest EV battery production operation in the U.S. Despite the recent slowdown in the EV industry, which prompted Ford to delay the construction of its second Kentucky plant in October 2023, production at the first two plants is still scheduled to commence in 2025.

Strategic Importance of the DOE Loan

This loan represents a key investment in the future of the U.S. automotive and energy sectors. As the U.S. seeks to meet rising domestic demand for EVs and maintain its leadership in the global electric vehicle market, the DOE's Advanced Technology Vehicles Manufacturing Program plays a vital role in providing financial support for innovative technologies. By securing this funding, SK On ensures it is well-positioned to support Ford’s EV ambitions while contributing to the nation's electrification goals.

With the ongoing growth of Ford's electrified vehicle sales—reaching 257,693 units between January and November 2024, marking a 40% increase from the same period last year—this new production capacity is expected to play a pivotal role in meeting rising demand. SK On’s battery production capabilities have also seen growth, with the company’s installations increasing by 9.5% year-on-year, capturing 4.5% of the global market share, according to SNE Research.