December 2, 2022

The U.S. Department of Energy said on Monday it would provide a $2.5 billion loan to a battery maker owned by General Motors and LG Energy Solutions to build battery factories, advancing a Biden administration plan to promote electric vehicles and reduce reliance on China for key components .

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

The U.S. government has played an important and often overlooked role in promoting electric vehicle technology. Many universities and entrepreneurs have received funding from the Energy Department’s Advanced Research Projects Agency to develop batteries that charge faster and have more energy per pound than earlier versions. Some of these companies, such as Sila Nanotechnologies of Alameda, Calif., and Solid Power, of Louisville, Colorado, are moving toward making advanced batteries for major automakers.

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

Domestic battery manufacturing can also help reduce the cost of electric vehicles. Batteries are heavy, and building them near a car factory often 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-car boom. Much of the corporate investment in new electric vehicle and battery factories has gone to southern states such as Tennessee, Alabama and Georgia.

“We must seize the opportunity to manufacture advanced batteries domestically — at the heart of this growing industry —” Energy Secretary Jennifer M. Granholm, former Michigan governor, said in a statement. said in the statement.

Separately, in a rare bipartisan effort, Congress passed an infrastructure law last year that the Biden administration hopes will lay the groundwork for millions of electric vehicles and create a domestic battery-making supply chain.

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

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