The US Department of Energy’s Loan Programs Office announces that it’s supplying a $2.5 billion loan to help begin three lithium battery manufacturing hubs in Michigan, Ohio, and Tennessee, according to CNN.
The DOE loan programs office will loan the money to Ultium Cells LLC, a joint venture (JV) of General Motors and LG Energy Solutions, making batteries to power electric vehicles. General Motors has promised to go all-electric by 2035, phasing out petrol and diesel-powered engines.
The DOE loan would “jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand.
US Energy Secretary Jennifer Granholm
DOE is laying out the accelerator to build the EV supply chain here at home, which begins with domestic battery manufacturing led by American workers and the unions that back them, says Granholm.
Granholm is traveling to Michigan on Monday, where she will appear with Governor Gretchen Whitmer and prominent lawmakers, including Senators Debbie Stabenow and Gary Peters.
EVs to make up half of US new vehicle sales by 2030
In President Biden’s first year in office, he laid a target to have electric vehicles make up 50% of all new vehicle sales in the US by 2030.
After the climate law Congress passed this summer, it is yet another sign that auto companies are racing to begin onshoring electric vehicle production. To take advantage of a federal electric vehicle tax subsidy in the Inflation Reduction Act (IRA), EVs and many of their battery components must be assembled, processed, and sourced in North America.
LG to partner with Honda
Separately, LG Energy Solutions is also set to partner with Japanese carmaker Honda on a $3.5 billion JV battery factory in southern Ohio.
Last October, Biden introduced the American Battery Materials Initiative, which the White House has referred to as “a new effort to mobilize the entire government and secure a reliable and sustainable supply of critical minerals used for power, electricity and electric vehicles.”
$2.8 billion for 20 manufacturing and processing companies
At the same time, the Administration vowed $2.8 billion from the Bipartisan Infrastructure Law passed in 2021 to 20 manufacturing and processing companies for projects in 12 states.
DOE approximates the three Ultium Cells facilities would open more than 11,000 jobs. The United Auto Workers would represent the Warren, Ohio, Ultium facility after the plant voted to unionize last Friday.
