Ultium Cells secures $2.5 billion loan from U.S. to expand battery manufacturing facilities

Industry

Published: 14 Dec. 2022, 12:09

Ultium Cells secures $2.5 billion loan from U.S. to expand battery manufacturing facilities

Ultium Cells' Ohio plant LG ENERGY SOLUTION]

Ultium Cells secured a $2.5 billion loan from the U.S. government to finance the expansion of its three electric vehicle (EV) battery manufacturing facilities in Ohio, Tennessee and Michigan.

LG Energy Solution said Tuesday it has signed a contract with the U.S. Energy Department to borrow up to $2.5 billion. Ultium Cells is a 50-50 joint battery venture between LG Energy and General Motors.

LG Energy said it will use the funds to expand the production capacities of the three plants. The Ohio plant started its operations last month, while the other two are expected to start mass production in 2025. The combined capacity will be 145 gigawatt-hours, which is enough to produce 2 million EVs.

"Large-scale funding is essential to acquire stable production capacity in the North American market, which is one of the fastest growing markets in the EV sector," said LG Energy Solution.

General Motors CEO Mary Barra in February hinted at the possibility of establishing its fourth plant with LG Energy Solution, though no official announcements have been made so far. Indiana has been reported as a promising candidate site for the next joint facility.

BY SARAH CHEA [chea.sarah@joongang.co.kr]