American taxpayers could give a loan of more than $7.5 billion to a partnership that includes Chrysler and wants to make batteries for electric cars in Indiana.
The Loan Program Office of the U.S. Department of Energy announced on Monday that StarPlus Energy has gotten a “conditional commitment” for the multi-billion dollar loan. The money would help FCA US and Samsung SDI Co. build two lithium-ion battery plants in Kokomo, which is 50 miles north of Indianapolis, if the plan is accepted.
The Indiana Economic Development Corp. promised hundreds of millions of dollars in state tax credits and other benefits to help the project before the loan was made public.
Stellantis, which owns FCA, and Samsung first said in May 2022 that they were going to build a battery plant for electric vehicles in Kokomo. The partners then said in October 2023 that they were going to build a second plant.
The project was announced on Monday and is expected to create up to 3,200 building jobs and 2,800 plant jobs. They think that the batteries made in Kokomo will power about 670,000 electric cars every year.
Stellantis was going to buy the batteries for cars that would be sold in the US.
A info sheet from the Energy Department says that the loan’s interest rate will be the “applicable U.S. Treasury rate for the term of the loan with no credit spread.” There were no details about the term provided right away.
The Energy Department said in a statement, “This project supports President Biden’s Investing in America plan to bring domestic manufacturing technologies back to the United States.”
The loan would come from the Advanced Technology Vehicles Manufacturing Loan Program of the federal government. This program was created by the Energy Independence and Security Act of 2007 and is run by the federal government. Grant money would be given to a second plant in Indiana. Last month, the Biden administration said that ENTEK would be getting a $1.3 billion loan to finish building a plant in Terre Haute to make separators for lithium-ion batteries.
Before the loan can be finalized, the Biden administration and StarPlus still need to meet some conditions. One of them is that StarPlus needs to make a Community Benefits Plan that shows how the business will work with labor groups and local government leaders. Workers from nearby trade groups are building the battery plants.
Officials in the administration also want StarPlus to take part in the Justice40 Initiative. This plan calls for 40% of the benefits from the government’s investment to go to areas that are “underinvested and overburdened by pollution.”
