Energy Department backs $2.5 billion loan to GM for electric vehicle batteries | Business news

WASHINGTON (AP) — A joint venture between General Motors Company and South Korean battery company LG Energy Solution will receive a $2.5 billion loan from the Department of Energy to build battery plants for electric cars in three states.

The Energy Department said it has made a conditional commitment to lend money to Ultium Cells LLC, a joint venture between GM and LG. The loan could help Ultium finance three lithium-ion battery plants planned in Michigan, Ohio and Tennessee, strengthening the Biden administration’s efforts to promote electric vehicles and reduce dependence on China for critical components.

The stations will help strengthen energy independence and support for the United States Biden’s goal That by 2030, electric cars will account for half of all car sales in the US, the Secretary of Energy Jennifer Granholm said.

Ultium Cells will supply GM as it works to convert its light truck fleet to fully electric by 2035.

The plants are expected to create up to 6,000 construction jobs and 5,100 operations jobs upon completion. Ultium Cells is just weeks away from opening its first electric vehicle battery plant in Lordstown, Ohio, which it says will help meet strong demand for electric vehicles.

The joint venture also plans to build battery plants in Lansing, Michigan, and Spring Hill, Tennessee. GM plans to announce the location of a fourth plant this year, CEO Mary Barra said Tuesday.

The federal loan will be the first exclusively for a battery cell project under the Advanced Technology Vehicle Manufacturing Program, which provides loans to support U.S. production of passenger vehicles and related components and materials that improve fuel economy, the Energy Department said.

Jigar Shah, director of Energy’s Office of Loan Programs, said Tuesday that the loan “will help build a domestic supply chain to meet the growing demand for electric vehicles” and “create thousands of good-paying jobs in the tri-state while providing improvements to existing lithium vehicles.” ion battery technology.’

Ultium Cells has put up about $2 billion to build each plant, but a GM spokesman said GM and LG’s joint venture financing commitments do not prevent them from receiving a loan under a program designed to promote clean energy technologies.

“If the loan is approved, it will reduce the amount of capital that the joint venture partners have to finance directly,” said spokesman Jim Cain. “Ultium Cells to repay loans with proceeds from sale of its GM cells”.

Tesla, Ford and Nissan are among the auto companies that received ATVM loans under the Obama administration.

AP staff writer Tom Krisher in Detroit contributed to this story.

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