Image: GM and LG in total are investing over $7bn through the JV to construct three EV battery plants. Credit: Ingo Leukers from Pixabay.
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The US Energy Department has announced its plans to provide a loan of $2.5bn to Ultium Cells, a joint venture of General Motors and LG Energy Solution, a unit of LG Chem, to help fund construction of a new lithium-ion battery cell manufacturing facilities, reported Reuters.
This loan is a conditional commitment to Ultium Cells for plants in Ohio, Tennessee, and Michigan.
It is expected to close in the months to come and is drawn from the government’s Advanced Technology Vehicles Manufacturing loan programme.
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This loan would represent the first for Energy Department solely for a battery cell manufacturing project under the programme.
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By GlobalDataThis programme earlier offered low-cost government loans to Tesla, Ford Motor, and Nissan, which included some cell manufacturing.
US President Joe Biden has set a target of 50% of auto production in the country by the end of this decade to be electric or plug-in electric hybrid vehicles.
In an interview with Reuters, Energy Department loan programme office director said: “We have to have vehicle manufacturing capacity but also battery manufacturing capacity.
“This project provides one of the newest additions to battery manufacturing scale in this country.”
Ultium said that the “facilities will create more than 5,000 new high-tech jobs in the United States. We are grateful for the consideration and look forward to working with the Department of Energy on next steps.”
GM and LG in total are investing over $7bn through the JV to construct three battery plants.
Production at the Ohio facility is expected to commence in August.
Currently, the facility in Warren, Ohio, has 700 employees.
Production is slated to commence at the Tennessee plant by late next year, and in Michigan in 2024.
In April, the department issued a conditional commitment for $107m loan to graphite miner Syrah Resources to expand its EV battery parts facility in Louisiana.
