ANN/THE KOREA HERALD – Ultium Cells – a joint venture between LG Energy Solution and General Motors – has secured a USD2.5 billion loan from the United States (US) Department of Energy to help finance the construction and expansion of three electric vehicle battery manufacturing facilities in Ohio, Tennessee and Michigan, officials said yesterday.
According to the Energy Department, the announcement marked the first finalised loan exclusively for a battery cell manufacturing project under the Biden Administration’s Advanced Technology Vehicles Manufacturing programme.
LG Energy Solution said the interest rate of the US government loan is on par with the 10-year US Treasury yield of about 3.6 per cent, approximately two percentage points lower than the rate a company with an AA rating would receive in the Korean bond market.
“In order to establish stable production capabilities in the North American battery market, which is expected to have the fastest growth rate, it is imperative to secure large-scale investment funds,” an LG Energy Solution official said.
“Amid the extremely difficult environment to secure investment due to recent rate hikes and economic slowdown, we have gained a foothold to continue our distinguished growing trend in the US by securing a long-term fund with a low-interest rate,” the official added.
Ultium Cells’ first plant in Ohio began production in August. The company is projected to have a total capacity of 145 gigawatts-hour per year once both the second and third EV battery manufacturing plants in Tennessee and Michigan, respectively, begin operation by 2025. It would be enough to power about two million high-performance EVs annually, according to the South Korean battery maker.