BlueOval SK, a joint battery venture between SK On and Ford Motor, will receive a $9.2 billion loan from the U.S. government for their joint three electric vehicles (EVs) battery factories in Kentucky and Tennessee.

The loan is the biggest single financial commitment the Biden administration has made in its effort to build an EV manufacturing network in the United States.

SK On said Friday that the joint venture has received conditional approval from the U.S. Energy Department for the low-cost loan under the Advanced Technology Vehicles Manufacturing program.

BlueOval SK and the government are expected to sign the formal deal within the year at the earliest.

The loan will be spent on the “construction of the three U.S. plants,” which will supply batteries for electric Ford and Lincoln cars and trucks, said SK On, a battery subsidiary of SK Innovation.

SK On and Ford Motor announced in 2021 that they will invest $11.4 billion to construct three EV battery plants in Tennessee and Kentucky.

The plants will together have 120-gigawatt hours annual capacity, enough to make 1.2 million EVs per year and replacing more than 455 million gallons of gasoline per year. The plants are scheduled to begin production in 2025.

The project is expected to create approximately 5,000 constructions jobs in Tennessee and Kentucky, and 7,500 operations jobs once the plants are up and running, according to the Energy Department.

BY SARAH CHEA [chea.sarah@joongang.co.kr]