The US Department of Energy intends to lend a joint venture to General Motors batteries worth $ 2.5 billion

WASHINGTON (Reuters) – The U.S. Department of Energy announced on Monday that it intends to lend a joint venture with General Motors Corp. (GM.N) and LG Energy Solution (373220.KS) $2.5 billion to help fund construction of new lithium-ion battery cell manufacturing facilities.

The conditional loan commitment to Ultium Cells LLC for facilities in Ohio, Tennessee and Michigan is expected to close in the coming months and comes from the government’s Advanced Technology Vehicle Manufacturing (ATVM) loan program, which has not funded a new loan since. 2010.

The plan, first reported by Reuters, would represent the Department of Energy’s first loan exclusively to a battery cell manufacturing project under the vehicle program.

Register now to get free unlimited access to

The program previously provided low-cost government loans to Tesla Inc (TSLA.O)Ford Motor (FN) and Nissan (7201.T)which included some cell manufacturing.

President Joe Biden has set a goal that 50% of US car production by 2030 will be hybrid electric or electric vehicles.

“We have to have the ability to manufacture cars but also the ability to make batteries,” Jigar Shah, who directs the Energy Ministry’s Loan Program Office, told Reuters in an interview. “This project provides one of the latest additions to the battery manufacturing scale in this country.”

“The facilities will create more than 5,000 new high-tech jobs in the United States. We are grateful for your consideration and look forward to working with the Department of Energy on the next steps,” Ultium said in a statement.

In all, GM and LG are investing more than $7 billion across the project to build three battery plants. A Ultium spokeswoman said production at the Ohio battery plant is expected to start in August. The plant, located in Warren, Ohio, currently employs 700 workers.

See also  The star witness in the Sam Bankman-Fried trial gives an inside account of an alleged criminal enterprise

Production at the Tennessee plant is scheduled to begin in late 2023 and Michigan in 2024.

“The goal is … to help these companies move faster and farther than they would otherwise have done,” Shah said. The loan agreement requires Ultium to offer employees the prevailing local wages and fringe benefits.

In April, the Department of Energy said it issued a conditional commitment for a $107 million loan to graphite miner Syrah Resources. (SYR.AX) To expand an electric vehicle battery parts plant in Louisiana.

Shah said the administration has received more than $18 billion in loan applications from the auto program and expects at least another $5 billion in applications that are actively being prepared.

“I think there will be more loans to be issued,” Shah said, but declined to provide a specific timetable.

The program currently has $17.7 billion of lending authority available. “For motivated borrowers, they can close these loans very quickly,” Shah said.

Australia-based Syrah plans to use the loan to expand a Louisiana plant that will process graphite mined from Mozambique into the anode, the battery’s positive electrode. The plant is expected to produce enough anodes for 2.3 million electric vehicles by 2040.

In February, the Department of Energy said it plans to provide $2.91 billion in grants to boost advanced battery production, and fund refining and production of battery materials, battery and packaging cell manufacturing facilities, and recycling facilities.

Register now to get free unlimited access to

(Reporting by David Shepardson in Washington Editing by Mark Potter and Tomasz Janowski

See also  Stocks fell, and the Japanese yen approached 150 against the dollar

Our criteria: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *