The U.S. Department of Energy is reviving an old loan program and its first recipient is the joint battery venture between General Motors and LG Energy Solution. The $2.5 billion loan issued to GM and LG Energy will be used to help finance the construction of new lithium-ion battery cell manufacturing facilities.
Reuters was first to report the news.
The loan to Ultium Cells, the name of the GM-LG joint venture, is expected to close in the coming months and will be used for its upcoming facilities in Ohio, Tennessee and Michigan. GM and LG have plans to invest more than $7 billion to jointly build three battery plants. Production at the Ohio factory is expected to begin in August. In Tennessee, production is scheduled for late 2023 and in Michigan for 2024.
The funds come from the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program, which was tasked with issuing up to $17.7 billion in federal loans and hasn't funded a new loan since 2010.
Tesla was one of the last automakers to receive a loan back in 2009, when the DOE loaned the EV-maker $465 million to help build its Model S sedan. To date, the program has dolled out $8 billion for products that have supported the production of more than 4 million advanced technology vehicles, according to the DOE. Ford and Nissan also received $5.9 billion in 2009 and $1.4 billion in 2010, respectively.