The US Energy Department is lending US$2.5bn to General Motors Company (NYSE:GM) and LG Energy Solution's joint venture Ultium Cells to build new lithium-ion battery cell manufacturing facilities.
In a statement, Ultium Cells said the deal would create 5,000 jobs in the United States.
An electric car maker hasn't received a loan from the Advanced Technology Vehicles Manufacturing Programme (ATVMP) since 2010, but the agency is getting ready to offer money again.
Manufacturing plants in Michigan, Ohio, and Tennessee will receive the funds, reports Reuters, with the loan subject to certain conditions.
While the Ohio plant will reportedly start production in August, Tennessee will follow in 2023 and Michigan in 2024.
In the early days of EVs, all previous loans under the ATVMP went to car manufacturers such as Tesla Inc (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and Nissan.
It has been a fruitful effort so far, as EV major Tesla grew rapidly after the loan during its early days and in 2013 paid back the Energy Department nine years early.
GM is rushing to establish battery factories to help clear an order backlog and make relatively mainstream electric vehicles like the upcoming Blazer and Equinox.
The extra funding will help the company cope with demand and meet US President Joe Biden's call for half of all new sales to be zero-emission by 2030.