Lexington, Kentucky, February 5, 2026
Ford Motor Company has announced plans to repay a $250 million loan to Kentucky after the termination of its joint venture with SK On, which aimed to produce EV batteries in Hardin County. The job creation targets associated with the loan will not be met, prompting state officials to enforce repayment for fiscal accountability. Ford intends to invest $2 billion in its Glendale facility for lithium-iron phosphate battery production, signaling a shift in its focus. Local officials are exploring new opportunities to mitigate economic impact.
Lexington, Kentucky – Ford Motor Company is set to repay a $250 million loan to the state of Kentucky following the dissolution of its joint venture with South Korean company SK On. This venture was originally intended to establish a plant in Hardin County for electric vehicle (EV) battery production. With the plant now closing, the financial implications for the state and the potential for future job opportunities are at the forefront of discussions.
The $250 million loan was issued by the Kentucky Economic Development Finance Authority (KEDFA) as an interest-free, forgivable loan, contingent on the fulfillment of specific job creation and wage targets. The original agreement outlined that the BlueOval SK facility needed to create 2,500 jobs by the end of 2026, escalating to 5,000 jobs in later years. However, given the recent developments, it’s clear that these targets are not achievable. Kentucky officials have stated that they will hold Ford accountable for repaying the loan, underscoring the importance of fiscal responsibility and transparency in agreements involving public funds.
Ford is pivoting its strategy following the closure of this joint venture, planning to invest approximately $2 billion in retooling the Glendale facility for a new purpose. The facility will focus on the production of lithium-iron phosphate (LFP) batteries for its upcoming battery energy storage systems division, known as Ford Energy, with operations projected to begin in 2027 and an expected workforce of around 2,100 employees.
### Key Facts Behind the Restructuring
Kentucky’s commitment to protecting taxpayer investments is evident in its approach to the situation with Ford. The funded initiative has faced challenges stemming from lower-than-expected EV demand and rising costs, which have led Ford to reevaluate its priorities within the EV market. The loss experienced in Ford’s EV business segment in 2024 reflects a broader pattern within the automotive industry, as many companies reassess their positions in an evolving market landscape.
Additionally, the original BlueOval SK project was hailed as a significant step in expanding EV production and infrastructure in the United States, with a planned $5.8 billion investment and high hopes for local job creation. The shift away from the initial plans has raised concerns among stakeholders, but Kentucky officials are actively working to identify new business opportunities for the repurposed facility, aiming to mitigate the economic impact of the closure.
### A Future Focused on Innovation and Community Impact
Ford’s evolving plans illustrate the company’s responsiveness to market conditions while highlighting its commitment to remaining a significant player in the automotive industry. As the company adapts, there is ample opportunity for local entrepreneurs and small businesses in Kentucky to rise to the occasion, potentially seizing the moment to fill gaps left by the shifting landscape.
Encouraging small-business innovation and resilience can play a pivotal role in mitigating the impact of such closures on local economies. Moreover, fostering a business environment characterized by lower regulations can empower entrepreneurs to explore new initiatives and drive economic growth within the state.
### Conclusion
In summary, while the dissolution of Ford’s joint venture with SK On raises challenges for Kentucky’s economic landscape, the state’s proactive measures underscore a commitment to fiscal accountability and local workforce development. As the community looks toward the future, the potential for innovation and new industry opportunities remain promising. Supporting local businesses and staying engaged with ongoing economic initiatives is essential for fostering a resilient and thriving community in Lexington, Kentucky.
### Frequently Asked Questions
Frequently Asked Questions
- What is the $250 million loan provided to Ford?
- The $250 million loan was an interest-free, forgivable loan from the Kentucky Economic Development Finance Authority (KEDFA) to support the construction of the BlueOval SK battery plant in Hardin County. The loan was contingent upon Ford meeting specific job creation and wage targets.
- Why is Ford repaying the loan?
- Ford is repaying the loan because the BlueOval SK joint venture with SK On has been dissolved, and the plant is being repurposed for a different purpose. The original employment and wage targets tied to the loan are unlikely to be met, prompting the repayment.
- What is Ford’s plan for the Glendale facility?
- Ford plans to invest approximately $2 billion to retool the Glendale facility for the production of lithium-iron phosphate (LFP) batteries intended for its new battery energy storage systems business, known as Ford Energy. Operations are expected to commence in 2027, with an anticipated workforce of 2,100 employees.
- How is Kentucky ensuring taxpayer protection?
- Kentucky officials have stated that they will hold Ford accountable for the loan repayment. The state has the authority to demand repayment if the company fails to meet the agreed-upon employment and wage benchmarks.
- What was the original purpose of the BlueOval SK project?
- The BlueOval SK project was initially announced in September 2021 as a joint venture between Ford and SK On, with plans to invest $5.8 billion in two massive plants manufacturing EV batteries and eventually employing at least 5,000 workers. This initiative was part of a broader effort to expand EV production and infrastructure in the United States.
| Key Feature | Details |
|---|---|
| Loan Amount | $250 million |
| Loan Structure | Interest-free, forgivable loan contingent upon job creation and wage targets |
| Original Employment Targets | 2,500 workers by end of 2026, increasing to 5,000 in subsequent years |
| Ford’s Investment in Glendale Facility | Approximately $2 billion to retool for lithium-iron phosphate (LFP) battery production |
| Anticipated Workforce for Reopened Facility | 2,100 employees |
| Expected Start of Operations | 2027 |
| Ford’s Stock Price (as of February 5, 2026) | $13.82 per share |
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