Ford Motor Co. Virtually Gets Bailout from Biden Administration, Via Green Energy Adherence
June 23, 2023
Shares of Ford Motor Co. (F) added yesterday, June 22, 1.21% against the neutral-to-falling broad market, as the legendary carmaker presented a completely new algorithm of survival.
According to Bloomberg, a major U.S. government initiative to fund Future Energy is a $9.2 billion contingent loan to Ford Motor Co. (F) to build 3 Li+ battery plants. The immense loan, the largest government bailout to date for U.S. automakers since the 2009 financial crisis, marks President Joe Biden's aggressive industrial policies aimed at helping U.S. manufacturers catch up with China in the green tech turning point. The three plants BlueOval is building, along with the adjacent Ford Electric Assembly Plant, are expected to cost $11.4 billion. BlueOval was previously funded by two state governments. That means taxpayers will pay nearly all of the cost at low interest rates.
The new factories, which will ultimately support Ford's foray into electric vehicles, are already being built in Kentucky and Tennessee by a joint venture called BlueOval SK, which is owned by the Michigan automaker and South Korean battery giant SK On Co. Ford plans to produce up to 132,000 electric vehicles by 2026, representing a massive increase compared to only two EV models production now.
A post-IRA shock to stimulus, government lending, and private sector investment fueled a manufacturing boom. There are more than 100 battery and electric vehicle production projects announced or under construction in the United States, with a total investment of about 200 billion US dollars.
Ford cars and SUVs built using the U.S. domestic batteries are also eligible for billions in stimulus, including $370 billion in clean energy funding from the Inflation Cut Act, a historic climate measure that went into effect about a year ago a part of. The U.S. government will subsidize battery manufacturing, and buyers can get an additional rebate of up to $7,500 per vehicle.
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