The U.S. Energy Department said on Monday it had finalized a $2.5 billion low-cost loan to a joint venture of General Motors Co and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities.
Reuters first reported in July the planned loan to Ultium Cells LLC from the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program.
The loan will help finance construction of new lithium-ion manufacturing facilities in Ohio, Tennessee and Michigan, supporting 6,000 construction jobs and 5,100 operations jobs at the three plants.
U.S. Energy Secretary Jennifer Granholm plans to tout the closing of the Ultium loan on a visit to Michigan on Monday with Labor Department Deputy Secretary Julie Su, Michigan Governor Gretchen Whitmer, United Auto Workers (UAW) President Ray Curry and other officials, automakers and EV battery companies. They will discuss strategies to recruit and retain a diverse and skilled battery workforce, and the Biden administration's Battery Workforce Initiative.
Last week, workers at the $2.3 billion Ultium plant in Ohio voted to join the UAW, a win for the union, which is seeking to organize the growing EV supply chain.
GM and LG Energy are considering an Indiana site for a fourth U.S. battery plant. They are building a $2.6 billion plant in Michigan, set to open in 2024. This month, Ultium said it would boost its investment in a $2.3 billion Tennessee plant by another $275 million.
President Joe Biden has set a goal for 50% of U.S. auto production by 2030 to be electric or plug-in electric hybrid vehicles. GM plans to build 1 million EVs in North America by 2025 and to stop selling gasoline-powered vehicles by 2035.
The $430 billion Inflation Reduction Act (IRA) approved in August included another $3 billion for ATVM loan costs and expanded uses to larger vehicles, maritime vessels, aviation, and other transportation modes.
The Energy Department said the $3 billion would provide an estimated $40 billion in additional loan authority for a total estimated available authority under ATVM of about $55.1 billion before the Ultium loan.
The ATVM loan program in July closed on a $102.1 million loan to Syrah Technologies LLC for expansion of a facility producing a key component for batteries. It was the first new loan finalized from the ATVM program since 2011.
The program previously supported Ford Motor, Tesla and Nissan Motor projects. GM applied for ATVM loans totaling $14.4 billion in 2009 but withdrew the application in 2011.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
