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DOE closes $2.5B loan for Ultium Cells battery production

DOE closes $2.5B loan for Ultium Cells battery production
(Ultium battery manufacturing plant in Ohio as of March 2022. Credit: Ultium)

The U.S. Department of Energy through its Loan Programs Office closed a $2.5 billion loan to Ultium Cells to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. 

Ultium Cells is a joint venture between General Motors and LG Energy Solution and will manage battery cell production for electric vehicles. 

Secretary of Energy Jennifer M. Granholm said in a statement that the loan will “jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand.

In related news, Ultium Cells said it plans to invest an additional $275 million in its Spring Hills, Tenn., plant to expand the facility’s battery cell output from 35 GWh to 50 GWh when the plant is fully operational. The new investment is in addition to the $2.3 billion investment announced in April 2021. Battery cell production at the 2.8 million-square-foot facility is slated to begin in late 2023.

With the additional investment, the capacity expansion is expected to create another 400 jobs, bringing the expected plant total to 1,700. The facility will supply battery cells to GM’s Spring Hill assembly plant for production of the Cadillac LYRIQ and other GM Ultium Platform-based EVs.

In July, LPO announced a conditional commitment for the loan to Ultium Cells to manufacture large format, pouch-type cells whose nickel-cobalt-manganese-aluminum (NCMA) chemistry is expected to deliver more range at less cost.

The cells can be arranged in different combinations to power pickups, SUVs and commercial vehicles. Ultium Cells plans to use the technology in coordination with GM’s work to eliminate all tailpipe emissions from its new U.S. light-duty vehicles by 2035. The manufacturing also supports GM’s plans to install capacity to produce more than 1 million EVs annually in North America and make its global products and operations carbon neutral by 2040.

In early December, hourly workers voted 710 to 16 to unionize the Ultium Cells plant in northeast Ohio. The UAW and the company had been at odds for months over the organizing process. The plant is located near GM’s former Lordstown Assembly.

The loan announcement was LPO’s first closed loan aimed exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing program. The recently enacted Inflation Reduction Act updates the ATVM program by appropriating $3 billion for the costs of direct loans to remain available through Sept. 30, 2028. 

Across all LPO’s new and improved programs, DOE has attracted 98 active applications for projects totaling more than $104 billion in requested loans and loan guarantees, as of the end of October. Also in October, the administration launched the American Battery Materials Initiative alongside $2.8 billion in grants from DOE to build out the domestic battery mineral and material supply chain.

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