Ford Gets $9.2 Billion To Help US Catch Up With China’s EV Dominance

The US government is providing a conditional $9.2 billion loan to Ford for the construction of three battery factories, the largest government backing for a US automaker since the 2009 financial crisis. “The enormous loan […] marks a watershed moment for President Joe Biden’s aggressive industrial policy meant to help American manufacturers catch up to China in green technologies,” reports Bloomberg. From the report: The new factories that will eventually supply Ford’s expansion into electric vehicles are already under construction in Kentucky and Tennessee through a joint venture called BlueOval SK, owned by the Michigan automaker and South Korean battery giant SK On Co. Ford plans to make as many as 2 million EVs by 2026, a huge increase from the roughly 132,000 it produced last year. The three-factory buildout by BlueOval plus an adjacent Ford EV assembly unit have an estimated price tag of $11.4 billion. BlueOval was previously awarded subsidies by both state governments. That means taxpayers would be providing low-interest financing for almost all of the cost.

Ford’s cars and SUVs made with domestic batteries will also be eligible for billions of dollars in incentives embedded in the Inflation Reduction Act’s $370 billion in clean-energy funding, part of the historic climate measure narrowly passed into law about a year ago. The US government will subsidize manufacturing of batteries, and buyers could qualify for additional tax rebates of up to $7,500 per vehicle.

The rush of incentives, government lending and private-sector investment has led to a manufacturing boom in the wake of the IRA. More than 100 battery and electric-vehicle production projects are announced or already under construction in the US, representing about $200 billion in total investments. “Not since the advent of the auto industry 100 years ago have we seen an investment like that,” says Gary Silberg, KPMG’s global automotive sector leader.