The US Department of Energy (DOE) announced on Monday it would loan $2.5 billion to an electric vehicle battery production venture between General Motors and LG Energy Solution.
In a statement, the DOE said the loan to Ultium Cells would finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. The project is expected to create more than 11,000 “good-paying” jobs, including 6,100 in construction and 5,100 in operations across the three facilities, DOE says.
The move is the latest in a batch of US government grants to EV manufacturers. In October, President Biden launched the American Battery Materials Initiative, which includes $2.8 billion in grants from the DOE to build the battery mineral and material supply chain. The US is also funding a network of electric vehicle chargers.
The loan comes as the White House seeks to reduce US reliance on foreign imports of EV battery minerals and materials, a market largely controlled by China at the moment.
GM last month said it expects to build 400,000 EVs in North America through the first half of 2024 and ramp up to 1 million units annually by 2025.
Other car manufacturers are also making big investments in battery technology in the US, in part so their cars can qualify for US tax credits. Ford and SK Innovation, for example, are building three battery factories in Kentucky and Tennessee, while Toyota will spend $3.4 billion on US battery production. BMW also plans to invest $1.7 billion in US EV battery production.
Announcing the $2.5 billion loan, US Secretary of Energy Jennifer Granholm said: “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.”