U.S. finalizes $2.5 billion loan to GM, LG battery joint venture

US Energy to provide low-cost loan to GM and LG Energy joint venture

The US Energy Department finalized that it will be providing a low-cost loan worth $2.5 billion to the joint venture Ultium Cells LLC. The joint venture is formed by General Motors and LG Energy Solution. The funds received will be used for building three new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan.

U.S. finalizes $2.5 billion loan to GM, LG battery joint venture
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According to US Energy Secretary Granholm the plans to highlight the closing of the Ultium loan in a visit to Michigan with Labor Department Deputy Secretary Julie Su on Monday. They will be joined by Michigan Governor Gretchen Whitmer, UAW President Ray Curry, and a number of representatives from automakers and EV battery firms. The group is expected to discuss a variety of topics, such as strategies for recruiting and retaining a skilled and diverse battery workforce.

Reports in July emerged stating that the government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program was planning to provide a loan to Ultium Cells LLC, a joint venture between LG Energy Solutions and General Motors. GM and LG’s three upcoming battery facilities in the United States are expected to support 6,000 construction jobs and 5,100 operations jobs. GM and LG Energy Solution are reportedly considering an Indiana site as a potential fourth US battery plant.

Electrification in the US

The goal set by US President Joe Biden for the US is to produce 50% electric or plug-in electric hybrid vehicles by 2030. This would require automakers in the United States to make a serious shift to electric cars. EV leaders such as Tesla have already expressed their ambitious goals, with the Texas-based EV maker aiming to produce 20 million electric cars annually worldwide by the end of the decade.

Construction is ongoing at a $2.6 billion plant in Michigan, which is expected to start operations in 2024. The joint venture also noted earlier this month that it would be increasing its investment in the Tennessee battery plant by about $275 million. According to Teslarati, GM and LG’s plant would likely see a notable amount of support from the current administration, particularly as President Biden has openly noted that he strongly supports unions. Just last week, the United Auto Workers (UAW) bagged a win after workers at GM and LG’s $2.3 billion Ohio battery plant voted in favor of a unionized workforce. The UAW is seeking to organize the growing electric vehicle (EV) supply chain. Other automakers are in process of availing all the support from the government. While the incentives are being talked about during discussions when it comes to EVs. Automakers’ priority remains in manufacturing and other facilities due to the drastic changes that are required.