The U.S. Department of Energy (DOE) took an important step toward speeding the nation’s transition to electric vehicles (EVs) when it finalized a $2.5 billion loan to help fund new EV battery facilities. The loan, announced in December, was made to a partnership between U.S. automotive giant General Motors and battery maker LG Energy Solution, a subsidiary of LG Chem.
Funds will go toward financing three lithium-ion cell manufacturing facilities. The joint venture, Ultium Cells LLC, received the loan from the U.S. government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program.
The facilities are located in Ohio, Tennessee, and Michigan and have created about 6,000 construction jobs and 5,100 operations jobs.Ohio Governor Mike DeWine toured Ultium Cell’s back in August in the lead up to the announcement. Now, the Ohio plant, located in the Lordstown/Warren area, is already up and running and producing batteries for GM’s current and upcoming EVs.
The $2.6 billion Michigan plant in Lansing is slated to open in 2024. The Tennessee plant is located in Spring Hill, just south of Nashville, and is expected to open in late 2023. Ultium said it would boost its investment in the $2.3 billion Tennessee plant by another $275 million. The joint venture is also weighing whether to build a fourth U.S. plant in Indiana.
The loan will be used to produce large-format, pouch-type cells that it claims can deliver more range for less money. According to the DOE, they can be arranged in different combinations for all EVs, including pickup trucks, SUVs, luxury cars, and commercial vehicles.
GM will use the technology to eliminate 100% of tailpipe emissions from its new U.S. light-duty EVs by 2035.
It also aligns with GM’s goal to install enough capacity to manufacture more than 1 million EVs annually in North America and transition its global products and operations to net-zero by 2040.
The GM-LG joint venture was formed in December 2019 with the establishment of the Ohio plant as a way to produce cells for future EV batteries. The state-of-the-art facility is designed to make them efficiently and with little waste, with the added benefit of building economies of scale throughout the value chain. It’s also set up to adapt to ongoing advances in technology and materials.
Ramping up battery production is a crucial element of helping the federal government spur more EV production and sales, which is a big reason the DOE provided the loan to GM and LG Energy.
“This loan will jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand and support the current administration’s goals of widespread EV adoption and cutting carbon pollution produced by gas-powered vehicles,” said U.S. Secretary of Energy Jennifer Granholm.
The government has set a goal that by 2030, half of all U.S. auto production will be devoted to electric or plug-in electric hybrid vehicles. GM plans to manufacture 1 million EVs in North America by 2025 and no longer sell gasoline-powered models by 2035.
The $430 billion Inflation Reduction Act, signed into law last summer, included $3 billion for ATVM loan costs, but the program had already funded plenty of other projects even before that.
In July, the ATVM program provided a $102.1 million loan to Syrah Technologies to expand its Syrah Vidalia plant in Louisiana. That facility produces graphite-based active anode material in lithium-ion batteries for EVs and other clean energy technologies.
Other companies that have received ATVM loans include Ford Motor, Tesla, and Nissan Motors.