Partnership from GM and LG helps finance $2.5 billion in battery cell plants

A $2.5 billion low-cost loan to a partnership between General Motors and LG Energy Solutions has been finalized, according to the U.S. Energy Department, and will be used to help finance three new lithium-ion battery cell manufacturing facilities. 

Along with the development of these new facilities, Ohio, Tennessee, and Michigan will also see the creation of 6,000 construction jobs and 5,100 operational positions. GM and LG Energy are constructing a $2.6 billion factory in Michigan, which is scheduled to open in 2024. In addition, Ultium wants to invest an additional $275 million in a $2.3 billion factory in Tennessee. 

According to Reuters, the government’s Advanced Technology Vehicles Manufacturing (ATVM) lending program will provide loans to Ultium Cells LLC. A further $3 billion was allocated under the Inflation Reduction Act (IRA) for the costs of ATVM loans and extended uses for larger vehicles and other modes of transportation. 

The $3 billion, according to the Energy Department, would grant $40 billion in extra lending authority, bringing the total up to $55.1 billion before the Ultium loan.

By 2030, President Joe Biden wants to produce 50% electric or plug-in hybrid automobiles in the United States. GM intends to stop selling gasoline-powered vehicles by 2035 and to assemble one million electric vehicles in North America by 2025.

The initiative had previously funded Nissan, Tesla, and Ford ventures. In 2009, GM submitted a request for $14.4 billion in ATVM loans, however, it was withdrawn in 2011. For the construction of a factory manufacturing a vital component for batteries, Syrah Technologies LLC SYR.AX received a $102.1 million loan from the ATVM loan program in July. Since 2011, only one new loan from the ATVM program had been finalized.

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