Competition is raging on the side of car manufacturers. Tesla, Ford and Nissan have a major new rival in electric vehicle models that is none other than General Motors. The latter has just obtained a government loan of 2.5 billion dollars to build electric vehicle battery factories. Recall that the advanced technology vehicle manufacturing program (ATVMP) of the Ministry of Energy has not offered a loan to an electric vehicle manufacturer for twelve years.
The “Ultium Cells” battery joint venture between General Motors and LG Energy Solution is the first beneficiary of this former program. This loan will be used to finance the construction of new manufacturing facilities for lithium-ion battery cells. These factories will be located in Michigan, Ohio and Tennessee.
General Motors getting the loan comes as no surprise
Joe Biden has many projects for his country, including the mass production of electric vehicles to preserve the environment. He said that by 2030, 50% of US auto production should be electric or plug-in hybrid electric vehicles. Jigar Shah, director of the Department of Energy’s loan program office, also announced that in addition to vehicle manufacturing capacity, America must also have capacity for batteries.
This additional funding may help General Motors better meet demand even though it is obvious that the company has a large car manufacturing capacity. Thus, the battery factories that he will build with this loan will allow him to eliminate an order book but also to produce relatively common models such as the future Blazer and Equinox electric vehicles.
More than 5,000 new jobs will be created
Ultium Cells is reportedly planning to invest over $7 billion in building the three battery factories. Production at the Ohio plant is expected to begin in August, that of Tennessee is scheduled for late 2023 and the last, which is in Michigan, in 2024.
This loan that the government has granted to the joint venture is very beneficial for the country. The new facilities will create 5,000 new high-tech jobs in the United States. And the loan agreement also requires Ultium Cells to provide employees with local wages and benefits.