The United States has taken a significant step in the realm of electric vehicle manufacturing by announcing a substantial $7.54 billion loan commitment to a joint venture between Stellantis and Samsung SDI. This move is aimed at building state-of-the-art electric vehicle battery plants in Kokomo, Indiana, with the potential to create thousands of jobs and strengthen North America's EV supply chain. The Department of Energy's (DOE) statement on Monday revealed that the loan will assist StarPlus Energy LLC in producing battery cells and modules for up to 670,000 electric vehicles annually. It also highlights a broader strategy to reduce the U.S.'s dependence on foreign energy resources, particularly from China, and drive domestic EV manufacturing. As stated in the DOE's announcement, "This will greatly expand EV battery manufacturing capacity in North America and reduce America’s reliance on adversarial foreign nations like China."

Stellantis' Logo at the North American International Auto Show

A Stellantis logo was prominently displayed at the North American International Auto Show in Detroit on September 13, 2023. This event marked a crucial moment as the U.S. made its $7.54 billion loan commitment to the Stellantis-Samsung SDI joint venture. The loan is set to fuel the construction of these essential battery plants, which will play a pivotal role in the future of the automotive industry.

Following a Similar DOE Initiative

This latest funding comes on the heels of a similar DOE initiative from last month. The DOE granted EV startup Rivian a $6.6 billion loan for a factory in Georgia. These investments demonstrate the government's commitment to supporting the growth of the electric vehicle sector and promoting domestic manufacturing.

Transitions at Stellantis

The announcement of the loan comes at a time of significant transitions at Stellantis, the world's fourth-largest automaker. On Sunday, CEO Carlos Tavares unexpectedly stepped down after nearly four years, citing ongoing challenges related to declining sales. Chairman John Elkann will lead an interim leadership team as the company searches for a permanent replacement. These leadership changes add an additional layer of complexity to the already significant project of building the EV battery plants.

Finalizing the Loan

Although the loan still needs to be finalized, the government's commitment signals its intent to finance the project. The finalization depends on StarPlus Energy meeting a series of rigorous requirements, including technical, environmental, and financial benchmarks. The venture must also develop a comprehensive plan to engage with local communities and labor organizations to ensure equitable economic benefits. If finalized, Stellantis would receive $6.85 billion in principle plus $688 million in interest for the project. However, it remains unclear whether the loan will be finalized before President-elect Donald Trump's January 20 inauguration. During the campaign trail, Trump was vocal about his opposition to such initiatives, dismissing them as part of a "green new scam." Efforts to obtain a response from Trump's transition team regarding the loan's status went unanswered as of Monday, according to The Associated Press (AP). Additionally, the Department of Energy did not directly answer questions on whether the funding would be finalized before Trump takes office. Instead, it emphasized that it would be irresponsible 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.