DETROIT — A collaboration between Stellantis and Samsung SDI has received an ambitious commitment from the federal government, offering a potential loan of up to $7.54 billion for the construction of two electric vehicle battery facilities in Kokomo, Indiana.
The venture, known as StarPlus Energy LLC, is anticipated to create a minimum of 2,800 jobs directly at the plants, along with an additional number in adjacent areas designated for suppliers of parts, according to a statement released by the Energy Department on Monday.
While the loan is not yet finalized, the government’s commitment indicates a strong intention to support this venture financially. To secure the funding, StarPlus is required to formulate a community engagement strategy that involves local and labor leaders to ensure the creation of quality employment opportunities. Furthermore, they must satisfy various technical, legal, environmental, and fiscal conditions before receiving government backing.
Given the timing, it remains uncertain whether the financing will be approved before the inauguration of President-elect Donald Trump on January 20. Throughout his campaign, Trump criticized similar funding initiatives, labeling them as part of a “green new scam.” A request for comments from Trump’s transition team went unanswered on Monday.
In response to inquiries regarding the potential timeline for the loan disbursement, the Energy Department refrained from giving a direct answer but emphasized the importance of continued partnerships with private sectors, states, and communities that stand to gain from reduced energy costs and economic growth driven by such financial assistance.
The proposed facilities are designed to produce battery cells and modules specifically for electric vehicles aimed at the North American market. At peak operations, these sites are projected to generate enough batteries to support around 670,000 vehicles annually, according to the Energy Department’s statement.
“This initiative will significantly enhance electric vehicle battery production capability within North America while decreasing the country’s dependence on foreign adversaries, such as China,” the department noted.
Should the deal go through, Stellantis could receive approximately $6.85 billion in principal plus an additional $688 million in interest for the endeavor.
In a related development, Rivian Automotive, an electric vehicle manufacturer, recently secured a substantial loan of $6.6 billion to establish a factory in Georgia, though construction has faced delays as the company struggles to achieve profitability.
The announcement of this significant loan comes just a day after Stellantis confirmed the resignation of CEO Carlos Tavares, who has held the position for nearly four years. The company, which oversees brands like Jeep, Ram, Citroën, and Peugeot, stated that the board accepted Tavares’ resignation on Sunday, which took effect immediately due to ongoing challenges related to declining sales.
Going forward, Stellantis indicated that an interim executive committee, headed by Chairman John Elkann, would be convened while the search for a new CEO is underway.