The U.S. Department of Energy (DOE) announced on Monday the closing of a $2.5 billion loan to Ultium Cells LLC, a joint venture between General Motors and South Korea’s LG Energy Solution, aimed at financing the construction of three new lithium-ion battery cell factories.
The three new factories will be built in Ohio, Tennessee, and Michigan, according to officials, and will produce lithium-ion battery cells for electric vehicles (EVs) amid the Biden administration’s effort to push for more Americans to drive EVs.
Ultium Cells LLC has factories currently under construction in Lansing, Michigan, and Spring Hill, Tennessee.
According to the DOE, the loan will help create approximately more than 11,000 “good-paying jobs” across the three facilities, including 6,000 in construction and 5,100 in operations.
The loan, which was issued by the DOE through its “Loan Programs Office” marks the first closed loan exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing program, officials said.
Biden Pushes for Increased EV Use
LG Energy Solutions is also partnering with Japanese automaker Honda on a joint venture to build a battery factory in Fayette County, Ohio, where the two companies will commit to investing up to $4.4 billion.The latest announcement comes as President Joe Biden continues to push Americans to turn away from traditional combustion engine vehicles and towards EVs, which are significantly more expensive, in an effort to reduce pollution and achieve his goal of ensuring that half of all new vehicles sold in 2030 are electric or plug-in electric hybrids.
According to the DOE, the loan to Ultium Cells LLC “directly” supports that goal.
In that same month, the administration announced it is awarding $2.8 billion in grants from the Bipartisan Infrastructure Law to 20 manufacturing and processing companies across 12 states to bolster the battery mineral and material supply chain.
Loan Will ‘Jumpstart’ Domestic Battery Cell Production
“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,” said U.S. Secretary of Energy Jennifer M. Granholm in a statement. “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.”The Consumer Reports 2022 Annual Auto Reliability, published in November, found that electric vehicles, including those from Tesla, are among some of the least reliable sold in the United States, while hybrid vehicles and mid-sized or large and gas-powered sedans are among the most reliable.
This, according to Kelley Blue Book estimates, is well above the industry average and aligns more with luxury prices as opposed to mainstream prices.
Meanwhile, the average price paid in November for a new non-luxury vehicle was $44,584, although the automotive company notes that this is still up $330 month over month due to soaring inflation.
