Kent Nishimura / Los Angeles Times via Getty Images
The Department of Energy preliminarily approved another loan to help fund the construction of electric vehicle battery factories in the US. This time, a joint venture between Stellantis and Samsung SDI will receive $7.54 billion to build two EV battery plants in Kokomo, Indiana.
The project is expected to create 3,200 jobs, as well as 2,800 operations jobs at the plants and hundreds more at a nearby supplier park. The conditional loan commitment will provide $7.54 billion — $6.85 billion in principal and $688 million in capitalized interest — to StarPlus Energy LLC, which is jointly owned by Stellantis and Samsung SDI.
The loan will come from the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) program, which was resurrected by President Joe Biden in 2022 to help fund the developing EV manufacturing industry in the US.
Much like the $6.6 billion loan conditionally approved for Rivian last month, the new loan to StarPlus Energy will need to beat the clock if it’s going to finalize its approval before Donald Trump takes over the White House.
Trump has promised to reverse or cancel much of the spending by Biden on EVs once he assumes office. He has said he will kill the $7,500 tax credit for new EV purchases, as well as wipe out the rest of the spending from the Inflation Reduction Act (IRA). Assumedly, that will include the ATVM loan program as well — even though it predates the IRA.
The loan program attained almost mythical status in the EV startup world thanks to its timely $465 million loan to Tesla in 2009, which is credited with helping save the company from an early death. But the program went fallow during the first Trump administration with a number of cash-strapped EV startups getting no response to requests for funding.
Biden brought the program back in 2022 with a $2.5 billion loan to a joint venture of General Motors and LG Energy Solution to help fund the construction of a new lithium-ion battery manufacturing facility. Since then, the program has made other commitments, including $9.2 billion to a joint venture between Ford and SK Innovation and $2 billion to Redwood Materials.
The Stellantis-Samsung plants are the latest beneficiaries of the program. According to DOE, the StarPlus project will produce about 67 GWh of batteries, enough to supply approximately 670,000 vehicles annually when it’s operating at full capacity.
Stellantis, which owns brands like Jeep, Dodge, Chrysler, and Ram, and international brands like Peugeot and Fiat, is going through some corporate upheaval that could determine its ability to meet the program’s demands. The company’s CEO, Carlos Tavares, recently announced that he would step down amid a sharp decline in sales in the US and abroad. And Stellantis is struggling to keep pace with its competitors in the shift to electric- and software-defined vehicles.