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General Motors goes electric with $2.5b US government loan for battery plants
Tesla is not the only biz that can take billions from American taxpayers
The US Department of Energy is set to hand General Motors' subsidiary $2.5 billion in loans to help finance the construction of three new EV battery cell plants across the midwest.
The recipient of the money is Ultium Cells LLC, a joint venture between GM and South Korean chaebol LG, which will use the money to assist in the construction of facilities in Lordstown, Ohio, Spring Hill, Tennessee, and Lansing, Michigan. The facilities are expected to produce a total of 6,000 construction jobs and 5,100 operational jobs, the DoE said.
The Ohio and Tennessee plants are already under construction and are expected to open later this year and in 2023, respectively, while the Michigan plant is scheduled to open in 2024. All three will produce nickel-cobalt-magnesium-aluminum pouch-type cells, which the DoE described as able "to deliver more range at less cost."
The DoE loan from its Advanced Technology Vehicles Manufacturing (ATVM) program, and is the first to be staged since 2010, when the program loaned money to Tesla to help finance a production facility for the Model S.
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Prior to this year, ATVM had only issued three loans: $5.9 billion to Ford in 2009, $1.45 billion to Nissan in 2010, and $465 million to Tesla. The latest loan will be the first from the DoE's Loan Programs Office, under which the ATVM falls, to focus exclusively on battery manufacturing.
The DoE's financial assistance to GM is a "conditional commitment" that may take a couple of months to finalize, based on the timeframe of previous submissions and loan disbursements under the program.
As for the new battery plants themselves, the Detroit Free Press reports the Ohio location will produce EV batteries for vehicles assembled in Detroit and Hamtramck, Michigan, beginning next month. The Tennessee plant will provide battery cells for a nearby assembly plant making Cadillac Lyriq electric SUVs, while the Michigan plant will operate adjacent to another GM plant.
The Free Press said that the Michigan plant will be part of a larger $7 billion manufacturing project in the state, which GM said will make Michigan an EV development and manufacturing hub.
The DoE cites statistics from Bloomberg NEF's 2022 Electric Vehicle Outlook report, which predicts global EV sales to grow from 6.6 million in 2021 to 20.6 million by 2025. To meet those demands, the report said the US would need to produce in excess of 580GWh of batteries by 2030.
As of February of this year, the US was ranked second in EV battery manufacturing capacity, with 44GWh of production annually. China, the only country with a greater capacity, is able to build a whopping 558GWh of battery capacity a year.
Like semiconductors, the US government sees EV batteries as another critical resource that needs to be manufactured in the States.
"We must seize the chance to make advanced batteries — the heart of this growing [EV] industry — right here at home," said Energy Secretary and former Michigan governor Jennifer Granholm. ®