GM And LG Joint Venture To Get $2.5 Billion Federal Loan For US Battery Plant

Ultium Cells – the new joint venture by General Motors and LG Energy Solutions is expected to give a fillip to lithium ion battery cell production in America after the US Department Of Energy (DOE) has announced granting it  a loan of $2.5 billion. The DOE has said that is in the process of reviving its loan program and Ultium Cells will be the first recipient of its new phase.

Under the scheme of things, the loan provided to Ultium Cells will be closed in the coming months. The funds will be used in the construction of three different battery manufacturing units in the US states of Ohio, Tennessee and Michigan. As per the statement of DOE, the three facilities will generate about 6000 jobs in the construction segment and over 5000 jobs in the operations when the facilities are fully operational.

Both General Motors (GM) and LG have been mulling an investment of over $7 billion in collaboration to build the three battery manufacturing units. As per details, the Ohio factory will begin the battery roll out in August this year. The Tennessee factory will be operational in late 2023 and the Michigan factory will start production in 2024.

The funding for Ultium Cells is coming from the Advanced Technology Vehicles Manufacturing (ATVM) loan program. The government program is mandated to issue up to $17.7 billion as federal loans to players.

Under this loan program, no loan has been disbursed since 2010. In 2009, Tesla was the last recipient of ATVM loans. The program has so far disbursed $8 billion, said DOE, that created products which supported the production of over 4 million advanced technology vehicles.

In 2009 and 2010, Ford and Nissan received $5.9 billion and $1.4 billion respectively. The fresh disbursal of loans after more than a decade shows that the Biden Administration wants to secure the supply chain as the government wants to see all new passenger vehicles’ sales by 2030 to be all in electric vehicles. DOE also held previously that it plans to provide $3.1 billion of funds from Bipartisan Infrastructure Law for the production of batteries and other components to strengthen the domestic supply chain and generate employment.