The US Department of Energy’s Loan Programs Office (LPO) has announced that it plans to loan $2.5 billion to a joint venture between General Motors (GM) and LG Energy Solution to help finance the construction of new electric vehicle (EV) battery cell manufacturing facilities.
The conditional commitment for the loan to Ultium Cells LLC is for facilities in Ohio, Tennessee and Michigan. The money will come from the government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program and is expected to close in the coming months. The three facilities are expected to create 6,000 well-paid construction jobs and 5,100 operations jobs when they are at full capacity.
This is a big deal and shows the government is committed to moving towards cleaner transport in the US. GM has also been making huge strides as it moves towards its electric future. Last year, the company announced it was accelerating its engineering and capital investments in electric vehicles and self-driving technology (AVs) by $8 billion to $35 billion from 2020-2025.
The company also recently invested $7 billion (£5.2 billion/€6.3 billion) in four Michigan manufacturing sites to significantly increase battery cell and electric truck manufacturing capacity. The investment alone will create 4,000 new jobs and retain 1,000 staff.
The LPO is offering this conditional commitment for the joint venture through the Advanced Technology Vehicles Manufacturing (ATVM) program. This provides loans to support US manufacturing of light-duty vehicles, qualifying components, and materials that improve fuel economy.
Financing from the ATVM program complements the historic investments secured by the Biden-Harris Administration in the Bipartisan Infrastructure Law – $7.5 billion for EV charging infrastructure and more than $7 billion for the critical minerals supply chains necessary for batteries, components, materials, and recycling.
This plan would mark the Energy Department’s first loan exclusively for an electric vehicle battery manufacturing scheme under the vehicle program. It has previously provided loans to electric car giants Tesla, Ford and Nissan, which included some battery production.
By manufacturing lithium-ion battery cells for electric vehicle battery packs in the United States, Ultium Cells will supply GM as it works to deliver its plan to eliminate 100 percent of tailpipe emissions from its new light-duty vehicles by 2035.
To support the goal of a zero-emissions future, GM plans to install capacity to build one million electric vehicles in North America by the end of 2025. Construction of these three plants also supports GM’s plan to make its global products and operations carbon neutral by 2040.
The cells manufactured by Ultium Cells LLC are large format, pouch-type cells that use a state-of-the-art nickel-cobalt-manganese-aluminium (NCMA) chemistry to deliver more range at less cost. The cells can be arranged in different combinations of flexible modules and battery packs to provide the energy for every segment on the road today, from performance vehicles to work trucks.
Jennifer Granholm, Energy Secretary, said: “As electric cars and trucks continue to grow in popularity within the United States and around the world, we must seize the chance to make advanced batteries — the heart of this growing industry — right here at home.”