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.
