US DOE grants $2.5 billion loan to Ultium for lithium-ion battery cell production

The US Department of Energy closed a $2.5 billion loan to Ultium Cells to help finance the construction of three lithium-ion battery cell manufacturing facilities in the country, it said Dec. 12.

Ultium, which is a North America-based battery joint venture between automaker General Motors and South Korea-based battery developer LG Energy Solutions, will be building lithium-ion battery gigafactories in Ohio, Tennessee, and Michigan.

The Ultium plants will supply batteries to General Motors, which looks to electrify 40% of its vehicle fleet by 2025.

"DOE is flooring the accelerator to build the electric vehicle supply chain here at home and that starts with domestic battery manufacturing led by American workers and the unions that support them," US Secretary of Energy Jennifer Granholm said in a statement.

"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," she added.

Since October, the DOE has been active in granting loans and pursuing significant investments to charge domestic EV production, battery recycling, and battery metal supply chains. The department's programs have included a combined $2.8 billion investment among 20 companies for the build-out of the US battery supply chain and a $74 million funding package in support of 10 battery recycling projects.

Other legislation under the Biden administration, such as the Inflation Reduction Act and Bipartisan Infrastructure Law, have earmarked $7.5 billion for EV charging infrastructure and $7 billion for critical minerals supply chains.