A $2.5 billion government loan has been approved for a joint venture among General Motors and the South Korean battery business LG Energy Solution to help fund three lithium-ion battery cell factories in Ohio, Tennessee, and Michigan.
Ultium Cells LLC is set to get a loan from the government’s Advanced Technology Vehicles Manufacturing (ATVM) funding program, which is estimated to provide 6,000 construction jobs and 5,100 operating jobs for the three factories.
The financing is a component of a federal initiative to meet the rising demand for electric car batteries.
The loan was revealed for the first time in July. The Biden administration has been seeking to increase energy independence in the United States and minimize reliance on China for crucial components. GM will be supplied by Ultium Cells as it aims to transform its light-duty fleet to all-electric by 2035.
According to the Energy Department, the $3 billion will offer an extra $40 billion in loan capacity, for a total projected available ability under ATVM of around $55.1 billion before the Ultium loan.
The factories will be built in Lansing, Michigan, and will begin cell manufacturing in August. They are constructing a $2.6 billion facility in Michigan, which is scheduled to open in 2024.