The US Department of Energy has approved a new loan for the construction of electric vehicle battery factories. This time, StarPlus Energy LLC, a joint venture between Stellantis and Samsung SDI, will provide $7.54 billion in financing for two battery factories in Indiana.
Two new electric vehicle battery factories to be built in Kokomo, Indiana, are expected to create 3,200 construction jobs and 2,800 operational jobs. Additionally, hundreds of new jobs will be created in a supply park to be established in the region. With the Department of Energy’s preconditional loan approval, StarPlus Energy LLC will receive a total of $7.54 billion with $6.85 billion in principal and $688 million in interest.
This loan is provided within the scope of the Advanced Technology Vehicle Production (ATVM) program, which US President Joe Biden reactivated in 2022. The ATVM program stands out as an important financing mechanism that aims to support electric vehicle production in the USA.
However, this loan may face political uncertainty in the future. Former President Donald Trump announced that the Biden administration would withdraw its spending on electric vehicles if he took office again. Trump has stated that he plans to eliminate the $7,500 tax credit for new EV purchases and halt spending under the Inflation Reduction Act (IRA). Although the ATVM program came into force before the IRA, the expenditures made within this scope are thought to be under threat.
The ATVM program made its name known with the $465 million loan provided to Tesla in 2009. This financing played a critical role in Tesla’s success. However, the program remained ineffective during the Trump administration and many startups did not receive a response to their funding applications. The Biden administration revived the program in 2022, providing a loan of $2.5 billion to the General Motors and LG Energy Solution partnership, $9.2 billion to the Ford and SK Innovation partnership, and $2 billion to Redwood Materials.
This new initiative from Stellantis and Samsung SDI is one of the latest beneficiaries of the program. According to the Department of Energy, these facilities in Kokomo will have a battery production capacity of approximately 67 GWh per year. This amount will be enough to support approximately 670,000 vehicles per year when operating at full capacity.
Stellantis includes giant brands
Stellantis owns brands such as Jeep, Dodge, Chrysler and Ram, as well as international brands such as Peugeot and Fiat. However, the company announced that its CEO, Carlos Tavares, would step down as it struggles with declines in both U.S. and global sales. For Stellantis, which has fallen behind its competitors in the transition to electric vehicles and software-oriented models, these projects are seen as a great opportunity to increase its competitiveness.