US$7.54 Billion DOE Loan For Indiana EV Battery Plant

 

The US Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment for a loan of up to US$7.54 billion (US$6.85 billion in principal and US$688 million in capitalized interest) to StarPlus Energy LLC (StarPlus Energy). The loan, if finalized, will help finance up to two lithium-ion battery cell and module manufacturing plants in Kokomo, Indiana. The borrower is a joint venture between FCA US LLC (a wholly owned subsidiary of Stellantis NV) and Samsung SDI Co. Ltd. (Samsung SDI). The output from the new facilities will be sold to Stellantis for use in electric vehicle (EV) models that will be sold in North America—helping ensure the United States can meet domestic demand and remain a global leader in the rapidly expanding EV industry. In May, Stellantis-owned Jeep revealed its first global battery-electric vehicle, the 2024 Jeep Wagoneer S Launch Edition.

The project is expected to create approximately 3200 peak construction jobs, up to 2800 operations jobs at the plants, and hundreds of additional jobs at a nearby supplier park. Together these jobs will boost the regional economy and add to the nearly 16 million jobs created since President Biden and Vice President Harris took office, according to the DOE.

At full capacity, the StarPlus project will produce about 67 GWh of batteries, enough to supply approximately 670,000 vehicles annually. DOE estimates the EVs produced using StarPlus batteries will displace the usage of 260.3 million gallons (985.3 million liters) of petroleum per year—helping to slash harmful pollutants that jeopardize public health and pollute local ecosystems. The project will greatly expand EV battery manufacturing capacity in North America and reduce America’s reliance on foreign sources of EV batteries.

LPO borrowers are required to develop and ultimately implement a comprehensive Community Benefits Plan (CBP). CBPs ensure borrowers meaningfully engage with community and labor stakeholders to create good-paying jobs and improve the well-being of the local community and workers. The new StarPlus facilities are being constructed under the National Maintenance Agreement, a national collective bargaining agreement, overseen by the National Maintenance Agreement Policy Committee. The NMA, to which all local building trades unions are signatories, helps to ensure workforce continuity and mitigate project delays.

Further, this project is expected to benefit disadvantaged communities in line with the Biden-Harris Administration’s Justice40 Initiative, which sets a goal that 40% of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.

StarPlus is also partnering with local educational institutions, such as Ivy Tech Kokomo and Purdue Polytech, to ensure local workers have the training required to fill the jobs. StarPlus is also developing Department of Labor-approved electro-mechanical apprenticeships.

This project reinforces President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing technologies. If finalized, the loan would be offered through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which provides loans to support U.S. manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy. With several recent ATVM projects in the last year, LPO is helping support the vehicle manufacturer’s product transformation plans.

While this conditional commitment indicates DOE’s intent to finance the project, DOE and the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan.

The announcement comes shortly after the DOE’s ATVM Loan Program offered a US$6 billion loan to Rivian to help the automaker accelerate EV production in the US.