Ford nets $9.2-billion federal loan to produce EV batteries in U.S.

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As Ford, along with the rest of the automotive industry, goes full-charge into vehicle electrification, there’s a heavy up-front investment needed to get several new processes underway—for example, the high-volume manufacturing of batteries for EVs. That’s why the Blue Oval is set to receive a US$9.2-billion (CDN$12.1-billion) loan from the United States’ Department of Energy’s (DOE) Loan Program Office, to use to erect three new battery factories, as per a recent Bloomberg article.

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But what’s the rush, and why does the company need so much? In 2022, Ford made approximately 132,000 EVs. By 2026, a mere three years from now, it’s shooting for two million per year. Add in the fact it’s expecting to lose $3 billion in 2023 on its EVs, and you’ll soon be reflecting on how Ford may have deep pockets, but short arms. Ford hopes to pump those money-losing brakes hard and regenerate profit by 2026.

One of the three plants – built in partnership with SK Innovation – will be a gigantic nearly-six-square-mile site in west Tennessee, while the other two are being built in central Kentucky at Ford’s BlueOvalSK Battery Park.

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Once these three factories reach full charge are completed, they’ll be turning out batteries for new electric Ford offerings, including an EV truck codenamed “Project T3.” All these future EVs will be eligible for manufacturer and consumer incentives under the U.S. federal Inflation Reduction Act, with the rebates totalling in the billions—that’s not a typo.

There are allegedly 7,500 jobs being created as a result of this loan, all in the name of reducing U.S. reliance on China for battery technology and production. Past recipients of loans from the Loans Program Office include Tesla, which received US$465 million in 2010 to increase production at its first factory, in Fremont, California.

For now, the proverbial light is shining a little brighter for the future of electrified Fords; let’s hope it doesn’t short.