The United States Energy Department has announced that it intends to loan both General Motors and LG a whopping $2.5 billion to help fund the construction of new lithium-ion battery cell manufacturing plants. The plan is also the Energy Department's first loan handed out exclusively for the manufacturing of battery cells.

These cells will go on to power electric vehicles like the Chevrolet Silverado, as well as hybrids like the upcoming Corvette and many other vehicles in the brand's portfolio. The loan is part of the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program. The program hasn't been used since 2010.

"We have to have vehicle manufacturing capacity but also battery manufacturing capacity," Jigar Shah, who directs the Energy Department loan program office, told Reuters. "This project provides one of the newest additions to battery manufacturing scale in this country." The loan will be handed directly to Ultium Cells LLC, which shares the same name as GM's new electric vehicle architecture.

The firm also issued a statement regarding the loan, saying that the "facilities will create more than 5,000 new high-tech jobs in the United States. We are grateful for the consideration and look forward to working with the Department of Energy on next steps."

The loan itself is part of a much larger $7 billion investment from GM and LG to build three totally new battery plants. Per Ultium, production at the Ohio facility is set to begin in August. Tennessee will follow in 2023 and the final Michigan plant will come online in 2024.

Interestingly, the loan agreement between the two companies and the Energy Department stipulates that Ultium must offer employees at least the local prevailing wage in addition to benefits. Shah said that "the goal is to... help these companies move faster and farther than they otherwise would have."

For now, GM and LG are the only ones benefitting from some Energy Department cash. However, the department has gotten more than $18 billion in loan requests, with another $5 billion in requests already being actively prepared. We can't imagine it will be long before another large loan is sent out to an automaker.