Stellantis’ joint venture with Samsung SDI has won a commitment from the US government for a loan of up to $7.54 billion to help build two electric vehicle battery factories in Kokomo, Ind.
The project, which is being built by StarPlus Energy LLC, is expected to create at least 2,800 jobs at the plant and hundreds more at a nearby park of companies that supply components, the Department of Energy said Monday in a statement.
The loan has yet to be completed, but the government said the commitment shows its intention to fund the project. In order to receive the loan, StarPlus must develop a plan to connect with the community and labor leaders to create good paying jobs. It must also meet technical, legal, environmental and financial conditions before the government can finance the loan.
It is unclear whether the loan will be finalized before President-elect Donald Trump takes office on January 20. On the campaign trail, Trump promised to end funding for such projects, which he called “the new green scam.” A message was left Monday seeking comment from Trump’s transition team.
The Ministry of Energy did not directly answer the question of whether the loan would be funded before the launch, but said it would be irresponsible for “any government to turn its back on its private sector partners, states and communities that benefit from low energy costs and new economic opportunities” from the loan.
The plants will make battery cells and modules for electric vehicles for sale in North America, the department said.
Once full, the plants will produce enough batteries to power about 670,000 cars a year.
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“This will significantly increase the production capacity of EV batteries in North America and reduce America’s dependence on hostile foreign countries such as China,” the statement said.
Upon completion, Stellantis will receive $6.85 billion in principal and $688 million in interest from the transaction.
Late last month, electric car company Rivian Automotive received a $6.6 billion loan to build a factory in Georgia that has stalled as it struggles to turn a profit.
The loan announcement comes a day after Stellantis confirmed that CEO Carlos Tavares is stepping down after nearly four years at the helm of the company that owns vehicles such as Jeep, Ram and Citroen and Peugeot. The world’s fourth-largest automaker announced that its board had accepted Tavares’ resignation on Sunday, which will take effect immediately, amid a struggle with declining car sales.
The company says an interim executive committee will be established, led by Chairman John Elkann, during the search for a CEO.
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