US commits $7.5 billion loan for 2 EV battery plants

The Biden administration has preliminarily approved a USD 7.54 billion loan to a joint venture between Stellantis and Samsung SDI to help fund the construction of two electric vehicle battery plants in Indiana.

The project in Kokomo, Indiana, is expected to create 3,200 jobs, along with 2,800 operations jobs at the plants and hundreds more at a nearby supplier park. 

The conditional loan commitment from the Department of Energy’s Advanced Technology Vehicles Manufacturing program will provide USD 6.85 billion in principal and USD 688 million in capitalized interest to StarPlus Energy LLC, which is jointly owned by Stellantis and Samsung SDI.

The venture will produce about 67 GWh of batteries, enough to supply approximately 670,000 vehicles annually, the DOE said.

“The project will greatly expand EV battery manufacturing capacity in North America and reduce America’s reliance on adversarial foreign nations like China, as well as other foreign sourcing of EV batteries,” the Department of Energy said in a blog post.

In order to get the loan, StarPlus needs to develop a plan to engage with community and labor leaders to create good-paying jobs. Other technical, legal, environmental and financial conditions also need to be met. 

However, like other big-ticket announcements made by the Biden administration in recent weeks, there is a question mark over whether the loan will be finalized before Donald Trump takes office on January 20, and if the new administration will be keen to facilitate the process.

The DOE said it would be irresponsible for “any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities” from the loans.

The funding comes days after the Biden administration’s conditional commitment for a USD 6.6 billion federal loan to Rivian Automotive to help fund Rivian’s planned EV battery factory in Georgia.