GM-LG battery joint venture secures $2.5 billion DOE loan

Ultium Cells, a joint venture between General Motors and LG Energy Solution, received final approval on Monday for a $2.5 billion loan from the Department of Energy to fund three new battery plants in the United States

Locations for the plants include Warren, Ohio, Spring Hill, Tennessee, and Lansing, Michigan, with an expected total of 6,000 jobs during construction and 5,100 jobs when the plants are at full capacity.

The Warren facility is already producing its first batteries, with initial work on site completed in August. The Spring Hill and Lansing plants are scheduled for completion in 2023 and 2025, respectively. According to Ultium Cells, the three plants will have the capacity to supply batteries for the production of one million electric vehicles annually.

The loan is part of the original $25 billion program to manufacture advanced technology vehicles that was launched in 2008 during the height of the global financial crisis. In addition to this existing program, the Biden administration passed an infrastructure bill last year that includes $7.5 billion for EV charging infrastructure and more than $7 billion for supply chains that support batteries, components, materials, and recycling are required. The government is laying the groundwork for its goal for the country to reach net-zero emissions by 2050 and for electric vehicles to account for half of all new car sales by 2030.

General Motors Ultium batteries

General Motors Ultium batteries

The DOE loan will be repaid by Ultium Cells with proceeds from the sale of batteries to GM and other companies using GM’s Ultium EV platform, such as Honda and Cruise. Honda will use the platform for its upcoming Prologue SUV and an Acura SUV. Cruise will use the platform for its self-driving Origin shuttle.

GM Energy, GM’s new company formed in October to provide energy-related services related to electric vehicles and their batteries, is also likely to be a buyer of the batteries.

Ultium Cells batteries feature large format, pouch-style cells constructed of nickel-cobalt-manganese-aluminum chemistry. The cells are unique in the industry in that they can be stacked vertically or horizontally within a battery pack. The design offers engineers more flexibility when installing batteries in different types of vehicles.

News of the loan coincides with an announcement by GM earlier this year that it has contracted battery raw materials to produce one million electric vehicles annually through 2025.

Leave a Comment