The U.S. Department of Energy said Monday it will provide $2.5 billion to General Motors and LG Energy Solutions to build battery factories, helping the Biden administration’s plan to promote electric vehicles and reduce dependence 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 produce batteries in Ohio, Tennessee and Michigan. The loan, which is contingent on the companies meeting certain requirements, is the first in more than a decade under a government program that provided $465 million to help build Tesla’s first sedan, the Model S.
The US government has played an important and often unheard of role in promoting electric vehicle technology. A number of universities and entrepreneurs have received money from the Energy Department’s Advanced Research Projects Agency to develop batteries that can be charged faster and contain more energy per pound than earlier versions. Some companies, such as Sila Nanotechnologies in Alameda, Calif., and Solid Power in Louisville, Colo., are moving closer to producing advanced batteries for major automakers.
The new Ultium plants are expected to provide more than 5,000 permanent jobs, the Energy Department said. GM said the Ohio plant, located in Lordstown, will begin producing battery packs this year.
Domestic battery production could also help lower the cost of electric vehicles. Batteries are heavy, and building them closer to car factories generally saves money.
Investments in Ohio and Michigan will help reassure labor leaders and state officials that they won’t be left behind in the EV boom. Much of the corporate investment in new electric vehicle and battery plants is going to southern states like Tennessee, Alabama and Georgia.
“We must seize the opportunity to create advanced batteries – the heart of this growing industry – right here at home,” said Jennifer M. Granholm, the energy secretary and former governor of Michigan, said in a statement.
Separately, in a rare display of bipartisanship, Congress passed an infrastructure law last year that the Biden administration hopes will lay the groundwork for millions of electric vehicles and establish a domestic supply chain for battery production.
The administration plans to spend $7.5 billion to build electric vehicle chargers on major highways, and more than $7 billion to supply 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.