GM And LG Finalize $2.5 Billion Loan For Battery Manufacturing

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The US Department of Energy just handed out one big bag of cash.

The Department of Energy has finalized a massive loan to GM and LG's joint battery venture. GM's battery-powered EVs, like the Cadillac Lyriq, will in the future be powered by these as-yet unproduced batteries. Reuters reports the $2.5 billion low-cost loan will pay for three new battery manufacturing facilities.

The new lithium-ion manufacturing facilities will be housed in three states: Ohio, Tennessee, and Michigan. In total, they will result in 6,000 construction jobs and 5,100 operations jobs once the building has finished.

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U.S. Energy Secretary Jennifer Granholm will meet with Labor Department Deputy Secretary Julie Su, Michigan Governor Gretchen Whitmer, and United Auto Workers (UAW) President Ray Curry after the terms of the loan have been finalized.

The group, along with other automakers and EV battery companies, will discuss recruiting workers for the new plants under Biden's Battery Workforce Initiative. Workers at one of GM's Ultium plants in Ohio just voted to join the UAW union, and we won't be surprised if, one day, these future new plant workers will do so as well.

Automakers, including foreign brands like Hyundai Motor Group, are hurrying to America for battery production to take advantage of the benefits under Biden's Inflation Reduction Act (IRA).

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2023 GMC Hummer Front Angle View

The report further states thatGM and LG are in talks for a fourth plant in Indiana. A $2.6 billion Michigan plant is already set to open in 2024. GM will also invest another $275 million in its Tennessee battery plant.

GM is on track to transition to electrification by 2035 and has said in the past that it aims for 1 million EVs in North America by 2050. This plant will no doubt help to achieve that.

Meanwhile, other political forces push North America towards electrification. Joe Biden's IRA included $3 billion for Advanced Technology Vehicles Manufacturing (ATVM) loans alone. Biden wants half of US auto production by 2030 to be fully electric or hybrid cars.

Critically, the Department of Energy has said that the initial $3 billion would provide somewhere near $40 billion in loan authority for a massive $55.1 billion total before GM's own Ultium loan.

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2023 GMC Hummer Front Angle View
Source Credits: Reuters

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