BlueOval SK Kentucky plant (Image provided by SK On)
SEOUL, Dec. 16 (Korea Bizwire) – The U.S. Department of Energy (DOE) has finalized a 14 trillion won low-interest loan for BlueOval SK, a joint venture between South Korea’s SK On and Ford Motor Company, to bolster domestic electric vehicle (EV) battery production.
The approval marks the largest EV-related loan under the Biden administration’s Advanced Technology Vehicles Manufacturing (ATVM) program.
Key Investment in U.S. Battery Production
The funding will support the construction of three battery plants in Kentucky and Tennessee, with operations set to begin next year. Once completed, the facilities will have an annual production capacity exceeding 120 GWh, sufficient to power approximately 1.2 million EVs. BlueOval SK has already invested over 15.8 trillion won in the project.
The DOE’s ATVM program, established under the 2007 Energy Independence and Security Act, offers low-interest loans to promote advanced vehicle manufacturing.
BlueOval SK’s loan underwent rigorous evaluations, including technological and market impact assessments, before receiving final approval, which exceeded the initial 11.8 trillion won (9.2 billion dollar) conditional approval granted in 2022.
SK Battery America (Image courtesy of SK On)
Biden’s Push for EV Investment
The loan aligns with President Biden’s “Invest in America” agenda to promote EV production and clean energy infrastructure. Recent DOE loans include 10.5 trillion won (7.54 billion dollar) for Samsung SDI and Stellantis’ StarPlus Energy venture and 9.2 trillion won for U.S.-based Rivian.
However, political uncertainty casts doubt on the continuity of such programs under the incoming Trump administration.
Challenges from the Incoming Administration
President-elect Donald Trump and his team, including Elon Musk and Vivek Ramaswamy, both slated for leadership roles in the new Department of Government Efficiency (DOGE), have expressed skepticism toward federal support for EVs.
Musk has criticized EV tax credits, advocating for the elimination of subsidies, while Ramaswamy has called recent loans a potential “fiduciary breach.”
Although the Biden administration has rushed to finalize these loans, their future implementation remains uncertain, with the Trump administration signaling possible reversals or additional scrutiny.
The fate of these investments could reshape the trajectory of U.S. EV manufacturing and its competitive positioning in the global market, especially as the country aims to challenge China’s dominance in the battery sector.
Kevin Lee (kevinlee@koreabizwire.com)
