US grants loans worth over $700 million for EV component plants

The US Department of Energy has announced preliminary approval for loans totalling 710 million dollars to produce EV technologies. The winners, SK Siltron CCS and American Battery Solutions are joining GM's Ultium Cells and Ford in the loan program.

As for today’s loans, South Korean company SK Siltron CSS is set to receive $544 million to expand a plant in Bay City, Michigan. It produces silicon carbide wafers, and those components are critical for EV drivetrains, including inverters and electrical distribution systems, the department said.

If the company manages to close the loan and deploy the money, about 200 jobs each in construction and production could be created to handle the plant expansion, the DoE added in the statement.

“This project is an important step towards ensuring a resilient and robust supply chain in the United States, and we are proud to bolster domestic semiconductor manufacturing,” said SK Siltron CSS CEO Jianwei Dong.

In addition, American Battery Solutions (ABS) is to receive a loan of $165.9 million to expand its assembly plants for electric vehicle battery packs in Springboro (Ohio) and Lake Orion (Michigan). Both facilities could employ up to 460 people. Last November, the company was acquired by Japan’s Komatsu.

Commenting on the commitments, Jigar Shah, director of the Department of Energy’s loan program office, told Reuters in Detroit that applications for $80 billion in financing have come to his office within the past two months from “very sophisticated players”.

The DoE finalised in December 2022 a $2.5 billion loan to finance battery plant construction by the Ultium Cells venture formed by General Motors and LG Energy Solution. They reportedly plan to build three US cell plants but scrapped plans for a fourth in January 2023.

However, Ford and battery partner SK On have yet to finalise a proposed $9.2 billion energy department loan to build three US battery plants. Last November, Ford postponed part of its planned billion-euro investment in new production capacity for electric vehicles. The decision also impacted its battery suppliers.

“We’re fully anticipating they are going to close the loan,” Shah said.

The department has disbursed $34.43 billion as of 31 December 2023. It received applications for $263.1 billion in loans as of the end of January.

“We hired specific people … to go beat the bushes to get people to use that,” Shah said. Many potential applicants are waiting in the hope that they can win grants, he said.

The conditional commitment is part of the Biden administration’s $221.8 billion loan capacity to fund clean-energy projects.

reuters.com, energy.gov (SK Siltron CSS), energy.gov (American Battery Solutions)