Dept of Energy giving $2.5B loan to GM, LG Energy Solution joint venture for EV battery cell facilities
The loan helps fund three EV facilities in the U.S.
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The Department of Energy announced Monday a $2.5 billion loan going to a General Motors-LG Energy Solution joint venture focused on making electric vehicle battery cells has closed.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 58.53 | +2.85 | +5.12% |
The newly-closed loan, going to Ultium Cells LLC, is meant to support the building of a trio of facilities for producing lithium-ion battery cells for EVs, the DoE said in a press release. Its finalization comes over four months after the department’s Loan Programs Office first announced it had offered a conditional loan to the General Motors-LG Energy Solutions joint venture through its Advanced Technology Vehicles Manufacturing program.
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The Energy Department said the three Ultium manufacturing facilities, located in Ohio, Tennessee and Michigan, are expected to result in a total of over 11,000 new jobs created. Of those new positions, roughly 6,000 will be construction and 5,100 will be operations, according to the agency.
Canada on Monday will announce its support for General Motors Co's multi-billion-dollar investment in two plants, including one that will produce electric commercial vehicles (EVs), a government source said. (Photo by Paul Hennessy/SOPA Images/Light … (Photo by Paul Hennessy/SOPA Images/LightRocket via Getty Images / Getty Images)
FILE PHOTO: An employee walks past the logo of LG Energy Solution at its office building in Seoul, South Korea, November 23, 2021. Picture taken November 23, 2021. (REUTERS/Kim Hong-Ji / Reuters Photos)
General Motors announced in June 2021 that it would be investing over $35 billion through 2025 as part of its growth strategy, including expanding its electric vehicle portfolio and constructing more battery factories in the U.S. More recently, in August, the company said it had secured enough battery raw materials to achieve 1 million EVs annually in North America by 2025.
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"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," Energy Secretary Jennifer Granholm said in a statement. "This loan will jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand and support President Biden’s goals of widespread EV adoption and cutting carbon pollution produced by gas-powered vehicles."
The U.S. Department of Energy's Information Association will release figures for August 2022 on Wednesday, September 14, 2022. The figures are expected to show stockpiles are expected to increase by 883,000 barrels. (Graeme Sloan/Sipa USA/REUTERS / Reuters Photos)
President Joe Biden aims for "half of all new vehicle sales" in the U.S. to be electric by 2030 and for the country to achieve net-zero greenhouse gas emissions by half-way through the century, goals that the loan to Ultium "directly" supports, the DoE said.
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Amid the Biden administration’s push to increase domestic EV and battery manufacturing, some companies have recently been making investments to build more EV batteries in the U.S.
Earlier in December, Hyundai announced it was partnering with South Korean firm SK On to construct a battery factory in Georgia, FOX Business reported. Honda Motor Co. and LG Energy Solution, meanwhile, said in October that they plan to build one in Ohio.