Ford will receive the largest government check for an automaker since the 2009 bailouts thanks to a $9.2 billion loan intended to help construct three electric vehicle battery plants in the U.S.
The loan from the Biden administration is aimed at boosting U.S. automakers in their race against China for green technologies and helping the auto industry reach Biden’s bold goal of electrifying 67% of all commercial passenger vehicles sold in the U.S. by 2032, Bloomberg reported. Ford is partnering with South Korean battery company SK On Co. in a venture called BlueOval to build three battery plants in Tennessee and Kentucky.
“Major technology transitions have always been accelerated by collaboration between the public and private sectors,” said Ford Treasurer Dave Webb, according to Reuters.
Biden’s commitment to Ford comes from a department within the EPA known as the Advanced Technology Vehicles Manufacturing (ATVM) loan program. It will be the single largest loan in the history of the program. Ford and SK have already started building the battery manufacturing facilities that will produce more than 120 gigawatt hours annually, the Energy Department said. BlueOval was awarded subsidies by both the Tennessee and Kentucky state governments before receiving the massive loan from the federal government, meaning taxpayers will fund almost all of the cost, according to Bloomberg.
The multi-billion-dollar loan met criticism from some who are troubled by the federal government’s interference with the free market to promote EVs. Steven Milloy, a lawyer and senior policy fellow with the Energy & Environment Legal Institute who served on former President Donald Trump’s transition team, wondered why the EV sector needed so much help from the government.
“If EVs are so great why does Ford and its South Korean partner need a $9.2 billion loan from taxpayers to build battery plants?” Milloy tweeted. “Why doesn’t the ESG cartel finance them?”
Ford wants to produce up to two million EVs by 2026. It produced 132,000 EVs last year, and the company projected the EV push would cost Ford $3 billion in 2023. The company is chasing Elon Musk’s Tesla for EV sales in the U.S. and remains far behind the electric car giant. Tesla, which started in 2003, lost money for ten years before finally turning a profit in 2013. Musk’s company made $12.6 billion in 2022, an impressive jump from $5.5 billion in 2021.
Along with the unprecedented push for EV sales, the Biden administration is expected to crack down on tailpipe emissions for cars made between 2027-2032. In March, the White House released a fact sheet announcing investments for the car industry to get EV sales to make up half of all new vehicle sales by 2030. As part of Biden’s Inflation Reduction Act, which seeks “to bring a clean, safe, affordable, and reliable transportation future to Americans,” certain buyers receive tax credits for purchasing new and used EVs.