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The Department of Energy will lend GM and LG $2.5 billion to build battery factories.


The US Department of Energy said Monday it would lend $2.5 billion to a battery maker owned by General Motors and LG Energy Solution to build battery factories, advancing the Biden administration’s plan to promote electric vehicles and reduce reliance on China for critical components.

GM and LG Energy, a South Korean battery maker, are partners in Ultium, a joint venture that will use the money to make batteries in Ohio, Tennessee and Michigan. The loan, which is conditional on the companies meeting certain requirements, is the first in more than a decade from a $465 million government program to help Tesla produce its first sedan, the Model S.

The US government has played a significant and often unrecognized role in promoting electric vehicle technology. Numerous universities and entrepreneurs have received money from the Department of Energy’s Advanced Research Projects Agency to develop batteries that can charge faster and pack more energy per pound than previous versions. Some of these companies, such as Sila Nanotechnologies in Alameda, California, and Solid Power in Louisville, Colorado, are moving closer to making advanced batteries for major automakers.

The new Ultium factories are expected to provide more than 5,000 permanent jobs, the Energy Department said. GM has said that the Ohio factory, which is in Lordstown, will start producing battery packs this year.

Domestic battery manufacturing could also help reduce the cost of electric vehicles. Batteries are heavy and building them near car factories usually saves money.

Investments in Ohio and Michigan will help reassure labor leaders and state officials that they won’t be left out of the electric vehicle boom. Much of the corporate investment in new electric car and battery factories goes to southern states like Tennessee, Alabama and Georgia.

“We must seize the opportunity to make advanced batteries, the heart of this growing industry, right here at home,” Jennifer M. Granholm, secretary of energy and former Michigan governor, said in a statement.

Separately, in a rare display of bipartisanship, Congress last year passed an infrastructure bill that the Biden administration hopes will lay the groundwork for millions of electric cars and establish a national supply chain for battery manufacturing.

The administration plans to spend $7.5 billion to build electric vehicle chargers along major highways and more than $7 billion to establish supplies of lithium and other materials used to make batteries. China dominates lithium processing and CATL, based in the city of Ningde, is the world’s largest battery maker.



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