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US Gov Lends GM $2.5 Billion For LG Battery Deal

By  |  December 12, 2022

The US Department of Energy announced a big boost to domestic electric vehicle battery production on Monday. It’s loaning $2.5 billion to a company called Ultium Cells, a joint venture between General Motors and LG Energy Solution that will build batteries for the automaker’s new range of EVs. The funds will help with the construction of three new battery plants in the US—in Lansing, Michigan; Lordstown, Ohio; and Spring Hill, Tennessee—as part of GM’s plan to build 1 million EVs a year by 2025.

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US battery production is set for massive growth in the coming years. First, the pandemic disrupted shipping, exposing the fragility of global just-in-time supply lines. Then, the Inflation Reduction Act of 2022 tied an EV’s potential tax credit to the domestic content of that EV’s battery pack, in terms of raw materials and final assembly. Each year, an escalating proportion of the battery must be domestic in order to qualify for the credits of up to $7,500.