The US Department of Energy is expected to announce on Monday that it will lend $2.5 billion to a joint venture between General Motors and LG Energy Solution, according to a Reuters report. The loan would help fund the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
The deal is expected to close in the coming months and comes from the government’s advanced technology vehicle manufacturing loan scheme. This would be the Department of Energy’s first loan for battery cell manufacturing facilities under this program.
Advanced Technology Vehicle Manufacturing has not funded a new loan since 2010, but has provided, and .
“We need to have vehicle manufacturing capability but also battery manufacturing capability,” Jigar Shah, who heads the Department of Energy’s loan program office, said in a statement to Reuters. “This project provides one of the newest additions to the scale of battery manufacturing in this country.”
Investment in lithium-ion battery manufacturing stems from a global push to create more sustainable transportation, including electric or hybrid vehicles. The Biden administration has set a goal to make half of all U.S. auto production electric or plug-in hybrid electric by 2030.
The US Department of Energy did not immediately respond to a request for comment.