Ford secures $9.2 billion loan from US Department of Energy to build EV battery factories
GM secures $2.5 billion government loan to build EV battery factories
The Energy Department’s Advanced Technology Vehicles Manufacturing Program (ATVMP) hasn’t offered a loan to an electric car maker since 2010, but it’s ready to offer money once again. As Reuters reports, the Energy Department is providing a $2.5 billion loan to the GM and LG joint venture Ultium Cells for the sake of constructing EV battery cell factories. This is the government agency’s first loan for battery production under the program.
The money will be used for manufacturing plants in Michigan, Ohio and Tennessee. It will come with conditions (unspecified as of this writing), and is expected to close sometime in the months ahead. Production starts at the Ohio plant in August, and should be followed by Tennessee in late 2023 and Michigan in 2024. Ultium in a statement characterized the deal as beneficial for the country, and expected it to create 5,000 US jobs.
All previous loans under ATVMP went to car manufacturers in the early days of EVs, including Tesla, Ford and Nissan. The efforts have so far been fruitful. Tesla, for instance, grew quickly with help from the loan during its early days. It finished repaying the Energy Department in 2013, nine years ahead of schedule.
The GM loan isn’t surprising. While the brand has extensive car manufacturing capacity, it’s racing to establish battery factories that will help it both clear an order backlog and produce relatively mainstream models like the upcoming Blazer and Equinox EVs. Extra funding may help GM cope with demand. President Biden, meanwhile, wants zero-emissions vehicles to represent half of all new sales by 2030 — that won’t happen unless GM and others can ramp up production to meet demand.