The United States Department of Energy announced that it intends to loan $2.5 billion to Ultium Cells.
Ultium Cells is a joint-venture company between LG Energy Solutions and General Motors.
The loan is to help finance the construction of three new lithium-ion battery cell facilities within the United States.
This is the first time since 2010 that the US Department of Energy has used the Advanced Technology Vehicles Manufacturing loan program.
Per Reuters, it will also be the first time a US Department of Energy vehicle program loan will be used exclusively for battery cell manufacturing.
More than a decade ago, Tesla, Ford and Nissan received low-cost government loans through the program.
However, the companies used the loans for various things, not just battery cell production.
In an interview with Reuters, US Department of Energy representative Jigar Shah said this about the announcement:
The goal is to… help these companies move faster and farther than they otherwise would have. [The] loan agreement requires Ultium to offer employees the local prevailing wage and fringe benefits.
Shah also noted that he thinks more loans are on the horizon.
However, he declined to provide a timeline or which companies have applied for the loans.
The department has received $18 billion in requests, with another $5 billion coming shortly.
The program currently has $17.7 billion in lending authority available to companies in the United States.
The Ultium Cells loan should close in the next few months.
