The loan helps finance three General Motors-LG joint venture battery manufacturing plants and signals long-term U.S. commitment to electric vehicles.
The U.S. Department of Energy (DOE) has finalized a $2.5 billion to Ultium Cells LLC to finance the construction of three lithium-ion (Li-ion) battery cell manufacturing plants. The money came through the DOE’s Loan Programs Office (LPO).
The three manufacturing facilities are in Warren, Ohio, Spring Hill, Tenn., and Lansing, Mich., respectively. Altogether they are expected to create more than 11,000 jobs—6,000 in construction jobs to build the plants and 5,100 in to operate them—across the three facilities. Once complete, these plants will batteries cells for electric vehicles (EVs).
Ultium Cells is a joint venture between General Motors and South Korea-based LG Energy Solution, a subsidiary of Korean multinational tech firm LG.
The DOE says this loan will help move towards the U.S. goal of reaching net zero emissions by 2050 and having EVs make up half of all new vehicle sales by 2030.
“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,” said U.S. Secretary of Energy Jennifer M. Granholm. “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.”
In July, the LPO announced a conditional commitment for the loan to Ultium Cells to manufacture large format, pouch-type cells that use a state-of-the-art nickel-cobalt-manganese-aluminum (“NCMA”) chemistry to deliver more range at less cost.
Those cells can be arranged in different combinations to provide clean, reliable energy for all vehicles on the road today, including pickups, SUVs and other family vehicles, as well luxury vehicles and commercial vehicles. The DOE estimates the battery cells manufactured by these facilities could reduce gasoline use by 480 million gallons per year. Ultium Cells says this technology will be used in coordination with GM’s work to eliminate 100 percent of tailpipe emissions from its new U.S. light-duty vehicles by 2035. This also supports GM’s plans to install capacity to produce more than one million EVs annually in North America and make its global products and operations carbon neutral by 2040.
This was the first loan exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing (ATVM) program. Financing from the ATVM program complements the investments of the Bipartisan Infrastructure Law—$7.5 billion for EV charging infrastructure and more than $7 billion for the critical minerals supply chains necessary for batteries, components, materials, and recycling.
Ultium Cells also announced an additional $275 million investment in Spring Hill plant to expand the facility’s battery cell output by more than 40 percent, from 35 gigawatt-hours to 50 GWh, when the plant is fully operational. This new investment is in addition to the initial $2.3 billion investment announced in April 2021.
“This investment will allow us to provide our customer GM more battery cells faster and support GM’s aggressive EV launch plan in the coming years,” said Tom Gallagher, Ultium Cells LLC vice president of operations. “Ultium Cells is taking the appropriate steps to support GM’s plan for more than 1 million units of EV capacity in North America by mid-decade.”
Battery cell production at the 2.8 million-square-foot facility will begin in late 2023. The company says it expects to have more than 130 GWh of battery cell capacity when all three facilities are at full production capacity later this decade.
