The US Department of Energy will announce on Monday that it will lend $2.5 billion to a joint venture between General Motors and LG Energy Solutions, according to a Reuters report. The loan will reportedly help finance the construction of new lithium-ion battery factories 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 program. This will be the first Department of Energy loan for battery cell manufacturing facilities under this program.
Advanced Technology Vehicles Manufacturing has not funded a new loan since 2010, but previously did Tesla loans ($465 million), Ford ($5.9 billion) and Nissan ($1.6 billion).
“We need to have vehicle manufacturing capacity, but also battery manufacturing capacity,” Jigar Shah, who heads the Energy Department’s credit program office, said in a statement to Reuters. “This project provides one of the latest additions to the scale of battery manufacturing in this country.”
The investment in the production of lithium-ion batteries stems from the global drive to create more sustainable transport, including electric or hybrid vehicles. The Biden administration has outlined a goal to make half of all U.S. car production electric or electric hybrid by 2030.
The US Department of Energy did not immediately respond to a request for comment.