The U.S. Department of Energy announced a conditional commitment of up to $7.54 billion in loans to StarPlus Energy LLC, a joint venture between Stellantis and Samsung SDI, to support the construction of two electric vehicle (EV) battery plants in Kokomo, Indiana. The proposed project marks a significant investment in the domestic EV industry and is expected to play a crucial role in advancing the country's clean energy agenda.
The loan, which includes $6.85 billion in principal and $688 million in capitalized interest, remains subject to final approval. The joint venture must meet various conditions, including technical, environmental, and financial requirements, before funding can proceed. With President-elect Donald Trump set to take office on January 20, the timing of the finalization has become a point of speculation. Trump has criticized green initiatives, labeling such efforts as part of a "green new scam."
The two battery plants are expected to create more than 2,800 jobs in Kokomo, along with hundreds of additional positions in nearby parts supply chains. At full capacity, the facilities will produce enough batteries to power approximately 670,000 electric vehicles annually, significantly bolstering Stellantis' electrification strategy in North America. Stellantis plans to begin operations at the first plant in early 2025, with the second slated to open in 2027.
The Energy Department emphasized that the project will reduce reliance on foreign supply chains, particularly from China, while expanding the nation's EV manufacturing capabilities. In a statement on Monday, the department noted the project would "greatly expand EV battery manufacturing capacity in North America and reduce America's reliance on adversarial foreign nations like China."
As part of the loan agreement, StarPlus Energy must engage with community and labor leaders to ensure the creation of high-quality jobs. The commitment also reflects a broader push by the Biden administration to accelerate the transition to clean energy through initiatives like the Advanced Technology Vehicles Manufacturing Loan Program, which supports the EV sector.
The political environment surrounding the loan, however, remains uncertain. Trump's incoming administration has expressed skepticism toward federally subsidized green energy projects. While the Energy Department defended the loan program, emphasizing its economic benefits and role in fostering industrial innovation, critics have raised questions about the government's long-term commitment to such investments.
The timing of the announcement coincides with significant leadership changes at Stellantis. CEO Carlos Tavares stepped down on Sunday after nearly four years, leaving the company to navigate challenges in a competitive and rapidly evolving auto market. An interim executive committee, led by Chairman John Elkann, will oversee operations while a permanent replacement is sought.
Stellantis has been actively expanding its EV capabilities worldwide, including plans for a gigafactory in Canada in collaboration with LG Energy Solution. The Indiana plants, supported by the U.S. loan, represent a key pillar of the company's North American EV strategy.
This announcement also follows recent government loans to other automakers, including a proposed $6.6 billion loan for Rivian's EV plant in Georgia and a $9.2 billion loan to Ford's joint venture with SK On for battery plants in Tennessee and Kentucky. These initiatives reflect the federal government's broader effort to position the United States as a global leader in EV manufacturing and clean energy technology.
