General Motors and LG Energy Solution are set to receive a $2.5 billion loan from the Department of Energy for their joint venture, which will manufacture batteries for electric vehicles. The DoE loan will help finance the construction of new production facilities for lithium-ion batteries, officials told Reuters.
The Advanced Technology Vehicles Manufacturing loan program will conditionally loan the sum to Ultium Cells LLC, a joint venture between GM and LG Energy Solution, which provides batteries for the automaker’s EVs. The loan will help the joint venture build facilities in Ohio, Tennessee, and Michigan. It is the first time the loan program has given money out in twelve years, last giving money to Tesla in 2010. Tesla paid back the loan nine years early.
The program has never given money to a company for a manufacturing facility that will build EV batteries. However, President Joe Biden has goals for at least half of the vehicles built in the US to be electric or plug-in hybrids by 2030.
The Biden Administration is attempting to help surge EV programs forward by setting aside a considerable portion of the $1 trillion Infrastructure Bill passed by Congress toward EV development. $7.5 billion of it is being set aside for the development of electric vehicle charging infrastructure.
“We have to have vehicle manufacturing capacity but also battery manufacturing capacity,” Energy Department Loan Program Office Director Jigar Shah said to Reuters in an interview. “This project provides one of the newest additions to battery manufacturing scale in this country.”
Battery manufacturers like Panasonic, LG, CATL, and others have been contracted to manufacture batteries for automakers as more companies transition to EVs. The best battery manufacturing companies are based in Asia for the most part, but those companies are starting to scout out land in North America for production sites.
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The Biden Administration also announced a $3.16 billion plan to boost US-based EV battery manufacturing in May. Batteries made in America batteries are going to help reduce emissions and create opportunities across the country,” White House National Climate Advisor Gina McCarthy said.
The United States also needs to continue expanding EV programs to keep pace with other countries. CEO Elon Musk said during the Q2 2022 Earnings Call last week that EV companies in China are a “force to be reckoned with.”
“Positioning the United States front and center in meeting the growing demand for advanced batteries is how we boost our competitiveness and electrify our transportation system,” Jennifer Granholm, US Secretary of Energy, said.
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