The US Department of Energy announced that it will provide a $2.5 billion loan to Ultium Cells LLC, a joint venture of General Motors Co (GM.N) and LG Energy Solution for the construction of a lithium-ion battery cell production facility.
The loan comes from the government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program. The program previously provided low-cost government loans to Tesla, Ford and Nissan.
President Joe Biden’s administration is targeting 50% of US car production by 2030 to be hybrid or all-electric vehicles.
“We have to have vehicle manufacturing capacity but also battery manufacturing capacity,” said Jigar Shah, who directs the Energy Department loan program office.
The battery production facility to be built is expected to create 5,000 new jobs.
“facilities will create more than 5,000 new high-tech jobs in the United States. We are grateful for the consideration and look forward to working with the Department of Energy on next steps.” Ultium said in a statement
GM and LG have invested more than $7 billion to build three electric vehicle battery factories. The Ohio battery production facility is expected to start in August with a total of 700 workers.
Meanwhile, production at the Tennessee plant will begin in late 2023 and in Michigan in 2024.
