SK to file for U.S. policy loan of up to $3.91 bn for battery plant projects

Groundbreaking ceremony of BlueOval SK Battery Park in Glendale, Kentucky held last month [Source : SK on Co.]

BlueOval SK, a joint venture between South Korea’s SK on Co. and global automaker Ford Motor Co. for manufacturing electric vehicle (EV) batteries, plans to apply for a loan from the U.S. government under the Advanced Technology Vehicle Manufacturing (ATVM) program, to speed up construction of its battery plants in the United States.

According to sources on Monday, BlueOval SK will soon file for ATVM funding from the U.S. Department of Energy for large-scale investment projects. Market watchers estimate that BlueOval SK can raise 3 trillion won to 5 trillion won ($3.91 billion).

Last year, SK on and Ford invested a total of 10.2 trillion won to establish BlueOval SK and decided to build three battery factories with two in Kentucky and one in Tennessee by 2025. The planned Tennessee plant will also have Ford’s electric vehicle production line. This project including the EV production line construction is expected to require more than 16 trillion won.

The industry expects that the results of BlueOval SK’s loan application will be released by the second quarter of this year at the latest.

SK on declined to confirm on detailed information about the loan application.

SK on already attracted 2 trillion won from its parent SK innovation Co. and 800 billion won from Korea Investment Private Equity last month.

SK on initially planned to raise 4 trillion won through a pre-IPO funding round early last year. However, investor sentiment was dampened by growing uncertainties due to the prolonged war between Russia and Ukraine, inflation and high borrowing costs.

During a groundbreaking ceremony of BlueOval SK Battery Park in Glendale, Kentucky held last month, SK on said it aims to become the world’s third-largest battery supplier by 2025.