US proposes $7.54 billion loan to Stellantis, Samsung SDI battery joint venture (updated)

Samsung SDI

02/12/2024 15:01

(Adds details on plants, background on other loans throughout)
    By David Shepardson
       WASHINGTON, Dec 2 (Reuters) - The U.S. Energy Department
said Monday it is planning to loan up to $7.54 billion to a
joint venture of Chrysler parent Stellantis  STLAM.MI  and
Samsung SDI  006400.KS  to help build two electric vehicle
lithium-ion battery plants in Indiana.
    The conditional commitment award must still be finalized and
includes $6.85 billion in principal and $688 million in
capitalized interest for the StarPlus Energy joint venture.
    The venture will build batteries in Kokomo, Indiana, for
Stellantis electric vehicles and at full capacity will produce
about 67 GWh of batteries, enough to supply approximately
670,000 vehicles annually, the Energy Department said.
    It is unclear whether the department will be able to
finalize the low-cost government subsidized loan before
President-elect Donald Trump takes office on Jan. 20. He has
been critical of the Biden administration's efforts to
incentivize EV production.
    Stellantis said on Monday the first plant would open in
early 2025 and the second in 2027. On top of the two facilities
announced in Indiana, Stellantis will build a gigafactory in
Canada with South Korea's LG Energy Solution  373220.KS .
    DOE in July said it planned to award Stellantis $334.8
million to convert its shuttered Belvidere Assembly Plant to
build EVs and $250 million to convert its Indiana Transmission
Plant in Kokomo to produce EV components but it has not yet
finalized the award.
    DOE is tapping the Advanced Technology Vehicles
Manufacturing loan program to boost the EV sector.
    Last week, the Energy Department said it was proposing to
loan Rivian up to $6.6 billion to build a plant in Georgia to
begin building smaller, less expensive EVs in 2028.
    In December 2022, DOE finalized a $2.5 billion low-cost loan
to a joint venture of General Motors Co  GM.N  and LG Energy
Solution to help pay for three new lithium-ion battery cell
manufacturing facilities in Ohio, Tennessee and Michigan.
    In June 2023, DOE said it planned to lend up to $9.2 billion
to a joint venture of Ford Motor  F.N  and South Korea's SK On
to help it build three battery plants in Tennessee and Kentucky,
the biggest-ever award from the government loan program. The
award still has not been finalized.

 (Reporting by David Shepardson)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))