To Finance Construction of 3 Battery Plants in the U.S.
Ultium Cells, an electric vehicle battery joint venture between LG Energy Solution and GM, has secured a US$2.5 billion loan from the U.S. government, the Korean battery maker announced on Dec. 13.
Ultium Cells signed a policy loan agreement with the U.S. Department of Energy (DOE) on Dec. 12 (U.S. local time) to finance the construction of three EV battery plants in the United States, one each in in Ohio, Tennessee and Michigan.
The interest rate is the same as the U.S. Treasury rate. The 10-year U.S. Treasury bond yield was about 3.6 percent as of Dec. 9, which is about 2 percentage points lower than the current interest rate of 5 to 6 percent for AA-grade corporate bonds in the won-denominated bond market.
Ultium Cells plans to use the loan to expand the production capacities of its first, second and third factories. Last month, the first plant in Ohio started mass production in earnest, and after 2025 when the second and third plants begin operations, Ultium Cells’ overall production capacity will swell to a total of 145GWh, an amount that can power about 2 million high-performance pure electric vehicles.