Stellantis, in partnership with Samsung SDI, has secured a commitment from the U.S. government for a loan of up to $7.54 billion to support the construction of two electric vehicle battery plants in Kokomo, Indiana. The joint venture, StarPlus Energy LLC, expects to create at least 2,800 jobs at the plants, along with additional opportunities for parts suppliers in the area, according to a statement from the Energy Department.
Though the loan is not yet finalized, the government’s commitment demonstrates its intent to fund the project. StarPlus must develop a plan to engage with local communities and labor leaders to ensure the creation of well-paying jobs. The company must also meet several technical, legal, environmental, and financial conditions before the loan is approved.
It remains uncertain whether the loan will be finalized before President-elect Donald Trump takes office on January 20. Trump, during his campaign, expressed opposition to such funding, calling it a “green new scam.” However, the Energy Department has indicated that it would be irresponsible for any government to disregard the economic opportunities and lower energy costs these projects bring to states and communities.
The new plants are expected to produce battery cells and modules for electric vehicles sold in North America, with a capacity to supply batteries for about 670,000 vehicles annually. If finalized, Stellantis would receive $6.85 billion in principal plus $688 million in interest for the project.
In related news, Rivian Automotive, another electric vehicle manufacturer, recently secured a $6.6 billion loan to build a factory in Georgia, although the project has stalled as the company struggles to turn a profit.
This loan announcement came a day after Stellantis confirmed CEO Carlos Tavares’s resignation after nearly four years in the role. Amid declining sales, the company’s board accepted his resignation, and an interim executive committee, led by Chairman John Elkann, will oversee the search for a new CEO.
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