The U.S. Energy Department has announced its intent to loan a joint venture of General Motors Co. and LG Energy Solution $2.5 billion to help finance construction of new lithium-ion battery cell manufacturing facilities.
The conditional commitment for the loan to Ultium Cells LLC will close in the coming months and comes from the government's Advanced Technology Vehicles Manufacturing loan program, which has not funded a new loan since 2010. The money will fund facilities in Ohio, Tennessee, and Michigan.
Previously, the program provided loans to Tesla Inc, Ford Motor Co. and Nissan.
But this loan marks the Energy Department's first loan for a battery cell manufacturing project.
"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."" said Jigar Shah, who directs the Energy Department loan program office, in a Reuters interview. The capacity will help meet the Biden Administration’s goal of 50% of U.S. auto production by 2030 being electric or plug-in electric hybrid vehicles.
Ultium noted in a statement that the facilities would create more than 5,000 new high-tech jobs in the U.S.