DOE lends $2.5 billion to GM, LG joint venture to build three lithium-ion battery plants

solar commercial loan financing

The foundation of the next wave of domestic battery manufacturing is starting to take shape. American Battery Factory and FREYR Battery both recently announced gigafactories for cell production. This week, Ultium Cells, a joint venture between General Motors and LG Energy Solution, announced its plans, aided by a big federal loan.

The U.S. Department of Energy (DOE), through its Loan Programs Office (LPO), closed a $2.5 billion loan to Ultium Cells LLC to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. Ultium will manage battery cell production at the three facilities and create approximately more than 11,000 jobs— 6,000 in construction jobs and 5,100 in operations.

In October, President Biden launched the American Battery Materials Initiative alongside $2.8 billion in grants from DOE to build out the battery mineral and material supply chain. This latest loan closing will directly support the President’s goals to reach net zero emissions by 2050 and having EVs make up half of all new vehicle sales by 2030.

“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. “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.”

In July, LPO announced a conditional commitment for the loan to Ultium Cells to manufacture large format, pouch-type cells that use a state-of-the-art chemistry to deliver more range at less cost. Those cells can be arranged in different combinations to provide clean, reliable energy for all vehicles on the road today, including pickups, SUVs and other family vehicles, as well luxury vehicles and commercial vehicles.

Ultium Cells plans to use this technology in coordination with GM’s work to eliminate 100% of tailpipe emissions from its new U.S. light-duty vehicles by 2035. This also supports GM’s plans to install capacity to produce more than one million EVs annually in North America and make its global products and operations carbon neutral by 2040.

This is LPO’s first closed loan exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing (ATVM) program.

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