Stellantis and Samsung SDI have just received major financial support from the U.S. government to accelerate the production of electric car batteries in the United States. A loan of nearly $7.6 billion will enable the StarPlus Energy joint venture to build two new plants in Kokomo, Indiana, creating thousands of new jobs and strengthening the local supply chain.
Stellantis and the loan commitment from the federal government for electric vehicle battery plants
We had already talked about the ambitious strategy at the end of August. In fact, in this regard, Stellantis in 2021 entered into a valuable agreement in this regard with the Samsung company, a decidedly strategic partnership with the South Korean company with its SDI part. Both companies have entered into a partnership to build a second Gigafactory that would be dedicated entirely to the production of electric vehicle batteries in the United States.
This venture was an early indication of how serious the Stellantis Group was about investing in the energy transition and reducing CO2 emissions. The new plant will be built by the StarPlus Energy joint venture and will have a production capacity of 34 gigawatt hours per year initially and will begin full-scale operations in 2027. and now comes the news that makes it clear that things are more serious and a big investment for it.
To that end in the last few hours from The Detroit News comes the news- A joint venture between Stellantis NV and Samsung SDI has obtained a loan of up to $7.54 billion from the U.S. government to help build two electric vehicle battery plants in Kokomo, Indiana.
StarPlus Energy LLC’s ambitious project
The loan has yet to be finalized, but the government said the commitment shows its intention to finance the project. In fact, to obtain such a government loan, the StarPlus company must develop a plan to engage community and union leaders to create well-paying jobs. It must also meet technical, legal, environmental and financial conditions before the government will finance the loan. Although as I understand it, these it provides for, as we will pick up more on the project talk below.
However, there is considerable uncertainty about whether the loan will be disbursed before the inauguration of new President-elect Donald Trump on January 20. Indeed, recall that during the campaign, President-elect Trump publicly pledged to stop funding for such projects, calling them ‘the new green scam.’ On Monday, a request for clarification was sent to Donald Trump’s transition team.
The Department of Energy, while not providing a direct answer to the question about the timing of the funding, stressed that it would be irresponsible for any administration to disregard commitments made to the private sector and communities that are already benefiting from these investments in terms of reducing energy costs and creating new economic opportunities. Basically adding that “it would be irresponsible for any government to turn its back on private sector partners, states and communities that are benefiting from lower energy costs and new economic opportunities” from the loans.
Production of EV battery cells and modules for the market in North America
The project built by StarPlus Energy LLC is expected to create at least 2,800 jobs at the plants and hundreds of other jobs in a nearby park for component supplier companies, the Department of Energy said Monday in a note.
“The plants will produce cells and modules for electric vehicle batteries to be sold in North America“-the department said. “At full capacity, the plants will produce enough batteries to supply about 670,000 vehicles a year. This will greatly expand electric vehicle battery production capacity in North America and reduce U.S. dependence on foreign adversary nations such as China,” the statement read. If finalized, Stellantis would get $6.85 billion in capital plus $688 million in interest for creating all of the above.