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

The Department of Energy previously approved additional loans to help finance the construction of electric vehicle battery factories in the US. In this case, the joint venture between Stellantis and Samsung SDI will receive $7.54 billion to build two EV battery plants in Kokomo, Indiana.

The project is expected to create 3,200 jobs, with 2,800 jobs in the industry and hundreds more in the nearby supplier park. The conditional loan obligation will provide $7.54 billion — $6.85 billion plus $688 million in interest — to StarPlus Energy LLC, which is jointly owned by Stellantis and Samsung SDI.

The loan will come from the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) program, which was revived by President Joe Biden in 2022 to help finance the growing EV manufacturing industry in the US.

Like the $6.6 billion loan approved by Rivian last month, the new loan from StarPlus Energy will need to hit every minute if it is to finalize its approval before Donald Trump takes the White House.

Trump has promised to roll back or cancel much of Biden’s spending on EVs once he takes office. He said he would kill the $7,500 tax credit for new EV purchases, as well as wipe out all spending on the IRA. Presumably, that would also include the ATVM loan program – even though it predates the IRA.

The loan program has achieved almost legendary status in the EV startup world thanks to a timely $465 million loan to Tesla in 2009, which is said to have helped save the company from an early demise. But the program failed during the Trump administration for the first time with the number of EVs strapped for money not getting a response to funding requests.

The Stellantis-Samsung plants are the latest beneficiaries of the program. According to the DOE, the StarPlus project will produce about 67 GWh of batteries, enough to power about 670,000 cars a year when fully operational.

Stellantis, which owns brands such as Jeep, Dodge, Chrysler, and Ram, and international brands such as Peugeot and Fiat, is facing some corporate turmoil that could determine its ability to meet the needs of the system. The company’s CEO, Carlos Tavares, has recently announced that he will step down due to the drop in sales prices in America and other countries. And Stellantis is struggling to keep up with its rivals in the transition to electric vehicles and software.