The U.S. Department of Energy (DOE), through its Loan Programs Office (LPO), has closed a $2.5 billion loan to Ultium Cells LLC to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
Ultium Cells, a joint venture between General Motors and LG Energy Solution, will manage battery cell production at the three facilities to address the growing U.S. consumer demand for electric vehicles (EV).
The project is expected to create approximately more than 11,000 jobs – 6,000 in construction jobs and 5,100 in operations – across the three facilities, including more than 700 United Auto Worker jobs in the newly-organized Warren, Ohio facility.
In October, President Joe Biden launched the American Battery Materials Initiative alongside $2.8 billion in grants from DOE to build out the battery mineral and material supply chain. This latest loan closing will directly support the president’s goals to reach net zero emissions by 2050 and having EVs make up half of all new vehicle sales by 2030.
“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,” says U.S. Secretary of Energy Jennifer M. Granholm. “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.”
In July, LPO announced a conditional commitment for the loan to Ultium Cells to manufacture large format, pouch-type cells that use a state-of-the-art chemistry to deliver more range at less cost. Those cells can be arranged in different combinations to provide clean, reliable energy for all vehicles on the road today, including pickups, SUVs and other family vehicles, as well luxury vehicles and commercial vehicles. Ultium Cells plans to use this technology in coordination with GM’s work to eliminate 100% of tailpipe emissions from its new U.S. light-duty vehicles by 2035. This also supports GM’s plans to install capacity to produce more than one million EVs annually in North America and make its global products and operations carbon neutral by 2040.
This announcement marks LPO’s first closed loan exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing (ATVM) program. Financing from the ATVM program complements the investments of the President’s Bipartisan Infrastructure Law – $7.5 billion for EV charging infrastructure and more than $7 billion for the critical minerals supply chains necessary for batteries, components, materials, and recycling.
Additionally, highlighting the Biden-Harris administration’s commitment to reinvigorating U.S. manufacturing, President Biden’s Inflation Reduction Act makes critical investments and updates to the ATVM program by appropriating $3 billion for the costs of direct loans to remain available through September 30, 2028, and uses from the President’s Bipartisan Infrastructure Law, including expanded uses for medium- and heavy-duty vehicles, maritime vessels, aviation, and other transportation modes. The Inflation Reduction Act also gives a clear demand signal for EV batteries as the auto industry races to build the vehicles of the future right here in America.
Across all LPO’s new and improved programs, DOE has attracted 98 active applications for projects across the country totaling over $104 billion in requested loans and loan guarantees, as of the end of October.