In June 2023 BlueOval SK, the battery joint venture between Ford and SK On, secured a loan commitment of $9.2 billion from the US Department of Energy. It was the largest in the history of the programme that made it. Yet a commitment is not a loan, and the money that was finally lent arrived eighteen months later, in a different amount.
Key takeaways
- BlueOval SK, the joint venture between Ford Motor and SK On, secured a $9.2 billion loan commitment from the US Department of Energy on 22 June 2023 to build three EV battery plants, one in Tennessee and two in Kentucky.
- The commitment was the largest in the history of the DOE's Advanced Technology Vehicles Manufacturing (ATVM) programme, according to the June 2023 announcement.
- The three plants are designed to deliver more than 120 GWh of US battery production a year and are expected to create 5,000 construction jobs and 7,500 operating positions.
- In December 2024 BlueOval SK secured a $9.63 billion loan from the DOE under the ATVM programme for the same three plants, $430 million more than the original commitment.
- Ford and SK Innovation unveiled the joint venture in September 2021 with plans to spend $11.4 billion on a battery plant in Stanton, Tennessee and twin facilities in Glendale, Kentucky, to supply batteries for Ford's EV line-up.
What is the difference between a loan commitment and a loan?
A commitment is a promise to lend on terms still to be finalised. In DOE lending, a conditional commitment signals that the department intends to finance a project once the borrower satisfies a list of conditions, typically covering final documentation, due diligence and the project's own progress. Only when those conditions are met does the loan close and money become available to draw.
That gap matters for anyone reading the June 2023 headline. The $9.2 billion figure described what the DOE was prepared to lend, not what had been lent. The Leap record for the closed financing, logged in December 2024, describes a $9.63 billion loan for the same three plants under the same programme. The story of this financing runs from the first record to the second.
Why did the loan grow by $430 million?
The records do not give a reason, and Enerdatics does not speculate on one. What they do show is the scale of the change. The final loan is about 4.7 percent larger than the commitment, on a project whose purpose and footprint did not change: three plants, in Tennessee and Kentucky, to make lithium-ion batteries for Ford's electric vehicles.
Set against the plan the partners announced in 2021, the loan covers most of the cost. The $9.2 billion commitment was equivalent to about 81 percent of the $11.4 billion the partners said they would spend, and the $9.63 billion loan to about 84 percent. Those ratios compare the loan with a planned spend announced two years earlier, so they indicate scale rather than a final capital structure.
What does $9.2 billion buy in battery capacity?
About $77 million of federal lending for every GWh of annual production capacity. The plants are designed to produce more than 120 GWh of batteries a year, enough, according to the announcement, to displace more than 455 million gallons of gasoline annually.
The figure is useful mainly as a yardstick. Battery manufacturing is measured in gigawatt hours of annual output in the way power generation is measured in megawatts, and lending per GWh is the natural way to compare one plant financing with another. It is not a construction cost, because the loan does not cover the full planned spend. Spread evenly across the three sites, the commitment would average about $3.1 billion per plant, although the record does not split it by plant.
The financing also carried policy weight beyond the plants themselves. The project supports the Biden Administration's Justice40 Initiative, which set a goal for 40 percent of the overall benefits of certain federal investments, and the administration's goal of electric vehicles reaching at least 50 percent of new US car sales by 2030.
Enerdatics records 23 EV sector financings in the United States announced between the start of 2022 and the end of 2024, worth $29.5 billion in total. The two BlueOval SK records, the $9.2 billion commitment and the $9.63 billion loan, are the two largest, and together they account for about 64 percent of that value. The other 21 financings add up to $10.7 billion. The next largest is an equity investment of $3.2 billion by LG Energy Solution in a US cylindrical battery plant, followed by a $2.5 billion DOE loan to battery maker Ultium Cells in December 2022.
What does the deal signal for US battery manufacturing finance?
It signals that federal lending, not private debt, has carried the largest US battery factory builds. The largest loans in this slice of Leap, to BlueOval SK and to Ultium Cells, both came from the DOE. BlueOval SK suggests a template: a vehicle maker provides the demand, a battery partner brings the cell technology, and the federal programme provides long-dated capital at a scale few commercial lenders would hold alone.
It also shows how long federal financings take to mature. From the joint venture's announcement in September 2021 to the commitment in June 2023 to the closed loan in December 2024 is more than three years. Projects that depend on this route need to be planned around that timetable, and the size of the loan can move during it.
Finally, the partners have used other funding channels in parallel. Ford secured $120.3 million in June 2023 for the Blue Oval Battery Park site, and SK Battery America issued a $500 million green bond in January 2024 to finance or refinance its US projects. The DOE loan sits at the centre of a broader capital stack rather than replacing it.
Frequently asked questions
How much did the DOE lend to BlueOval SK? The DOE made a $9.2 billion loan commitment in June 2023. In December 2024 BlueOval SK secured a $9.63 billion loan under the Advanced Technology Vehicles Manufacturing programme for the same three plants.
Where are the BlueOval SK battery plants? There are three plants: one in Stanton, Tennessee and twin facilities in Glendale, Kentucky. Together they are designed to produce more than 120 GWh of batteries a year.
Who owns BlueOval SK? BlueOval SK is a joint venture between Ford Motor Company and SK On, the South Korean battery manufacturer. It was created to supply batteries for Ford's growing range of electric vehicles.
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