Biden administration announces $2.5 billion loan to help GM and LG make EV batteries

CNN
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The US Department of Energy’s Loan Programs Office will announce Monday that it is issuing a $2.5 billion loan to help start three lithium battery manufacturing hubs in Ohio, Tennessee and Michigan.

The DOE loan programs office will loan the money to Ultium Cells LLC, a joint venture of General Motors and South Korean battery manufacturer LG Energy Solutions making batteries to power electric vehicles. General Motors has pledged to go all-electric by 2035, phasing out conventional gas and diesel-powered engines.

In a statement, US Energy Secretary Jennifer Granholm said the DOE loan would “jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand.”

“DOE is flooring the accelerator to build the electric vehicle supply chain here at home – and that starts with domestic battery manufacturing led by American workers and the unions that support them,” Granholm said.

Granholm is traveling to Michigan on Monday, where she’ll appear with Gov. Gretchen Whitmer and prominent lawmakers including Sens. Gary Peters and Debbie Stabenow.

In President Joe Biden’s first year in office, he set a target to have EVs make up half of all new vehicles sales in the US by 2030.

After the climate law Congress passed this summer, it’s yet another sign that auto companies are racing to start onshoring electric vehicle production. In order to take advantage of a federal EV tax subsidy in the Inflation Reduction Act, electric vehicles and much of their battery components be sourced, processed and assembled in North America.

LG Energy Solutions is also set to partner with Japanese automaker Honda on a $3.5 billion joint venture battery factory in southern Ohio.

In October, Biden introduced the American Battery Materials Initiative, which the White House has called “a new effort to mobilize the entire government and securing a reliable and sustainable supply of critical minerals used for power, electricity and electric vehicles.” At the same time, the Administration pledged $2.8 billion from the bipartisan infrastructure law passed last year to 20 manufacturing and processing companies for projects in 12 states.

DOE estimates the three Ultium Cells facilities would create over 11,000 jobs. The Warren, Ohio, Ultium facility will be represented by the United Auto Workers, after the plant voted to unionize on Friday.