Stellantis and Samsung to get $7.54 billion federal loan for two EV battery factories

The Department of Energy is preliminary approved another loan To finance the construction of an electric vehicle battery factory in the United States. The joint venture between Stellantis and Samsung SDI will receive $7.54 billion to build two EV battery factories in Kokomo, Indiana.

The project is expected to create 3,200 jobs, as well as 2,800 operational jobs at the factory and hundreds more at the nearby supplier park. The conditional financing commitment provides $7.54 billion in principal and $688 million in capital interest to StarPlus Energy LLC, which is jointly owned by Stellantis and Samsung SDI.

The loan comes from the DOE’s Advanced Technology Vehicle Manufacturing (ATVM) program, which was reinstated in 2022 by President Joe Biden to provide funding for America’s developing EV manufacturing industry.

Like the $6.6 billion conditionally approved loan to Rivian last month, the new loan to Star Plus Energy also requires time to complete approval before Donald Trump takes the White House. It is necessary to make it in time.

President Trump has promised to reverse or cancel much of Biden’s EV spending once he takes office. He said he would eliminate the $7,500 tax credit for new EV purchases and cancel remaining Inflation Control Act (IRA) spending. Presumably this will also include the ATVM financing program, which predates the IRA.

The financing program achieved near-mythical status in the world of EV startups thanks to its timely loan of $465 million to Tesla in 2009. This loan is credited with saving Tesla from an early crisis. However, the program went dormant during the first Trump administration as many cash-strapped EV startups did not respond to funding requests.

Stellantis and Samsung factories are the latest beneficiaries of this program. According to the DOE, the StarPlus project will produce approximately 67 GWh of batteries, enough to power approximately 670,000 vehicles annually at full capacity.

Stellantis, which owns brands such as Jeep, Dodge, Chrysler and Ram, as well as international brands such as Peugeot and Fiat, is experiencing corporate upheaval that could affect its ability to meet the program’s demands. The company’s CEO, Carlos Tavares, recently announced that he would step down following a sharp decline in sales in the United States and internationally. and Stellantis have trouble keeping pace Competitors are moving toward electric and software-defined vehicles.