US Department of Energy Proposes $7.54 Billion Loan for Stellantis and Samsung SDI EV Battery Plants in Indiana

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US Department of Energy Proposes $7.54 Billion Loan for Stellantis and Samsung SDI EV Battery Plants in Indiana

The U.S. Department of Energy (DOE) has announced a conditional commitment to provide up to $7.54 billion in loans to StarPlus Energy LLC, a joint venture between FCA US LLC, a subsidiary of Stellantis N.V., and Samsung SDI Co. Ltd. This loan aims to support the construction of two lithium-ion battery cell and module manufacturing facilities in Kokomo, Indiana, with the goal of advancing the U.S. position in the electric vehicle (EV) market.

The proposed financial package consists of $6.85 billion in principal and $688 million in capitalized interest. Once operational, the facilities are expected to produce approximately 67 gigawatt-hours (GWh) of batteries annually, thereby powering around 670,000 EVs each year. The batteries produced at these facilities will be used by Stellantis in its EV models in North America.

The DOE's support is part of the Biden-Harris Administration’s broader America’s Jobs Plan, which promotes domestic manufacturing and job creation. The StarPlus project is expected to create up to 3,200 jobs during its peak construction phase and provide 2,800 operational jobs within the facilities. Additionally, this initiative will contribute to the local economy by creating hundreds of job opportunities in a nearby supplier park.

According to DOE estimates, EVs powered by StarPlus batteries could replace 260.3 million gallons of gasoline annually, thus reducing pollutants and dependence on foreign battery supplies, particularly from countries like China. This aligns with the Administration's goal of increasing EV battery manufacturing capacity in North America.

The Loan Programs Office (LPO) requires debtors like StarPlus to develop a Community Benefits Plan (CBP) that facilitates engagement with community and labor stakeholders to create quality jobs and enhance local prosperity. The construction of the new facilities will be governed by the National Maintenance Agreement (NMA), ensuring workforce continuity and minimizing project delays.

The initiative is also aligned with the Justice40 Initiative, which aims for 40% of the benefits from certain federal investments to reach disadvantaged communities affected by pollution and underinvestment. StarPlus is collaborating with local educational institutions such as Ivy Tech Kokomo and Purdue Polytech to provide necessary training and is developing Department of Labor-approved apprenticeship programs to support workforce development.

The loan, which will be provided through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, is part of the Administration's efforts to bring back domestic manufacturing technologies. However, before finalizing the loan, both the DOE and StarPlus Energy must meet specific technical, legal, environmental, and financial conditions.