The U.S. Department of Energy said Monday it will provide $2.5 billion to General Motors and LG Energy Solution to build battery factories, advancing the Biden administration’s plan to push electric vehicles and reduce reliance on China for critical components.
GM and LG Energy, a South Korean battery maker, are partners with Ultium, a joint venture that will use the money to make batteries in Ohio, Tennessee and Michigan. The loan, which depends on companies meeting certain requirements, is the first in more than a decade that the government has provided $465 million to help Tesla produce its first Model S sedan.
The US government has played a significant and often inconspicuous role in the advancement of electric vehicle technology. Numerous universities and entrepreneurs have received money from the DOE’s Advanced Research Projects Agency to develop batteries that can charge faster and contain more energy per pound than earlier versions. Some of these companies, such as Sila Nanotechnologies in Alameda, California and Solid Power in Louisville, Colorado, are moving closer to manufacturing modern batteries for major automakers.
The new Ultium plants are expected to provide more than 5,000 permanent jobs, the Department of Energy said. GM said the Ohio plant, located in Lordstown, will start producing batteries this year.
Domestic production of batteries can also help reduce the cost of electric vehicles. Batteries are heavy and installing them near car factories usually saves money.
Investment in Ohio and Michigan will help reassure union leaders and government officials that they will not be left out of the electric car boom. Much of the corporate investment in new electric vehicle and battery factories is heading to southern states such as Tennessee, Alabama and Georgia.
“We should seize the opportunity to make advanced batteries – the heart of this growing industry – right here at home,” said Jennifer M. Granholm, Secretary of Energy and former governor of Michigan.
Separately, in a rare show of bipartisanship, Congress last year passed an infrastructure bill that the Biden administration hopes will lay the foundation for millions of electric vehicles and create a domestic 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 supply lithium and other materials used to make batteries. China dominates lithium recycling, and Ningde-based CATL is the world’s largest battery manufacturer.