SK On secures $9.6 billion U.S. government loan for Kentucky, Tennessee battery plants

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SK On secures $9.6 billion U.S. government loan for Kentucky, Tennessee battery plants

Published: 17 Dec. 2024, 15:06

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

The BlueOval SK Battery Park Kentucky in Glendale, Kentucky is a joint venture between SK On and Ford to build two EV plants. [SK ON]

Korean battery maker SK On secured a $9.63 billion loan from the U.S. government for its three battery manufacturing facilities in Kentucky and Tennessee, a jointly investment with Ford Motor.

The U.S. Energy Department said Monday that the loan is the largest granted through its Advanced Technology Vehicles Manufacturing program as part of the Biden administration’s Investing in America agenda.

The three plants, in total, will produce more than 120 gigawatt-hours of U.S. battery production annually, which is enough to power up to 1.2 million EVs. It will create up to 7,500 new jobs.

“Expanding the domestic production of American-made batteries is critical to reducing America’s reliance on adversarial foreign nations like China, meeting the nation’s domestic and international climate commitments and achieving President Biden’s goal to make half of all new vehicles sold in 2030 zero-emissions vehicles,” the Energy Department said as the reason behind the loan decision.

The duo, called BlueOval SK, have committed roughly $11.4 billion in investment in two plants in Kentucky and one in Tennessee. The three will have up to 43 gigawatt-hours of capacity each.

The first, in Kentucky, is slated to start production in the first half of 2025, with the Tennessee planned for late 2025.

The operation of the second Kentucky plant has been delayed.

“The construction of the No. 2 Kentucky plant will proceed as scheduled, but the operation has been delayed due to various reasons including the low demand for EVs,” said a spokesperson for SK On.

SK On made an operating profit of 24 billion won ($16.7 million) in the third quarter for the first time since its establishment three years ago after being split off from its parent company, SK Innovation.

The U.S. government, in early December, also granted a $7.54 billion loan to Samsung SDI for its two battery plants in Kokomo, Indiana, with Stellantis.

BY SARAH CHEA [[email protected]]