GM joint venture to receive $2.5B government loan for US battery plants – Meczyki.Net

The US Department of Energy is reviving an old loan program and its first recipient is a joint battery venture between General Motors and LG Energy Solutions. The $2.5 billion loan issued to GM and LG Energy will be used to help finance the construction of new lithium-ion battery cell manufacturing facilities.

Reuters First reported the news.

The loan to Altium Cell, named the GM-LG joint venture, is expected to close in the coming months and will be used for its upcoming facilities in Ohio, Tennessee and Michigan. GM and LG plan to jointly invest more than $7 billion to build three battery plants. Production at the Ohio factory is expected to begin in August. In Tennessee, production is scheduled for late 2023 and in Michigan for 2024.

Altium told Reuters that the facilities will create 5,000 new high-tech jobs in the US. The loan agreement requires Altium to offer employees locally prevalent pay and fringe benefits.

Funds come from the government advanced technology vehicle manufacturing (ATVM) loan program, which was tasked with issuing up to $17.7 billion in federal loans and has not funded a new loan since 2010.

Tesla was one of the last automakers to receive a loan back in 2009, when DOE extends $465 million loan to EV-maker To help build your Model S sedan. To date, the program has given $8 billion dollars to products that have supported the production of more than 4 million advanced technology vehicles, according to the DOE. Ford and Nissan also received $5.9 billion in 2009 and $1.4 billion in 2010, respectively.

While the plan is the first time DOE will specifically issue a loan for a battery cell manufacturing project under the VAHAN program, it is not the first time we are seeing governments getting involved in securing battery supplies.

Joint ventures between automakers and battery chemistry and cell manufacturers have been cropping up regionally in recent years in response to a de-globalizing post-COVID world. The governments of Germany, South Korea and China have already begun to financially support local battery manufacturing to help strengthen supply chains.

The revived DOE loan program shows the Biden administration is also keen to secure its supply chain as part of its plan Half of all new passenger vehicle sales To have EVs by 2030.

The DOE did not timely respond to Meczyki.Net’s questions about whether it would continue to fund battery projects. In April, the agency said it had issued a conditional commitment to a $107 million loan to Australian graphite miner Syrah Resources to expand an EV battery parts plant in Louisiana. Graphite is an important part of the anode of a lithium-ion battery.

The agency said in February that it plans to provide $3.1 billion in funding From Biden’s bipartisan infrastructure law to making more batteries and components in the US, boosting the domestic supply chain and creating jobs.

The DOE told Reuters the department has received more than $18 billion in loan requests from the auto program and expects $5 billion to come through. The department also said more loans would be released, but did not provide a specific timeline.