Strengthening USA’s Domestic Lithium-ion Battery Manufacturing Base & Supply Ecosystem
LPO Announces Conditional Commitment to ABS to Strengthen America’s Domestic Lithium-ion Battery Manufacturing Base and Supply Ecosystem
The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to American Battery Solutions (ABS) for a $165.9 million loan to help finance the expansion of an advanced battery pack assembly facility to support light-, medium- and heavy-duty electric vehicle (EV) and industrial equipment applications at its Springboro, Ohio, and Lake Orion, Michigan, facilities. If finalized, the loan will help enable ABS’s production of approximately 4.2 GWh of lithium-ion battery packs annually at full capacity by 2026. At that level of battery production capacity, the project could support enough EVs to displace approximately 71,000 metric tonnes of CO2 emissions each year from gasoline-powered vehicles. Upon completion, the project would create or support 460 high-quality, good-paying operations jobs in Springboro, Ohio; Lake Orion, Michigan; and surrounding communities.
This project supports President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing of technologies that are critical to achieving the clean energy and transportation future. Onshoring battery manufacturing is critical to reducing America’s reliance on our economic competitors, like China, which currently dominates the industry and supplies many American companies with materials to resell non-domestically produced batteries. LPO, leveraging additional loan authority provided by the President’s Inflation Reduction Act, is spurring hundreds of billions in new private sector investments that are boosting the nation’s competitiveness, strengthening supply chains, and creating good-paying jobs in communities across the nation.
This project also reinforces President Biden’s deep commitment to growing the American economy from the bottom up and middle-out—from rebuilding our nation’s infrastructure, to creating a manufacturing and innovation boom powered by good-paying jobs that don’t require a four-year degree, to building a clean-energy economy that will combat climate change and make our communities more resilient.
ABS is seeking to expand its lithium-ion battery pack assembly capacity to capitalize on rapidly growing demand from the EV market, which saw unprecedented progress in 2023. The project will finance the construction of four high-voltage (HV) and four low-voltage (LV) battery pack assembly lines in Springboro, Ohio. ABS will also upgrade its existing battery cell testing and quality control equipment at its existing facility in Lake Orion, Michigan.
The project will support ABS’s goal of delivering standardized and customized battery packs for various EV and other battery market segments, including smaller or lower-volume markets, such as startups, or medium- and heavy-duty vehicle manufacturers, such as the makers of electric delivery vans, trucks, and buses. Applications in HV market segments include electrified fleet and commercial vehicles, and other EV applications; while LV market segments include industrial applications like low-speed electric vehicles and industrial equipment, as well as auxiliary batteries for EVs. ABS has existing customers and offtake agreements in both market segments.
Battery packs are an integrated system consisting of many components including cells, battery management, safety systems, and enclosures. Since ABS procures cells from third parties, ABS can remain adaptable and responsive to advancements in battery chemistry cost and performance. For example, if a new or improved chemistry comes to market, ABS can begin to acquire that type of cell and pass on improvements to its customers. This enables ABS to focus on the other critical steps in the manufacturing process—such as design, assembly, and integration. ABS has existing agreements for supply of essential components, including the lithium-ion battery cells, that it then assembles. DOE performs rigorous due diligence related to all aspects of a potential deal, including supply agreements, for all projects.
Currently, the majority of battery production for the U.S. market occurs in Asia; however, the President’s Investing in America agenda has laid out a whole-of-government approach and provided key incentives necessary to establishing strong battery supply chains right here in America. This project is one of many projects benefitting from these efforts, and it will strengthen the domestic lithium-ion battery manufacturing base and supply ecosystem.
The project will directly benefit Springboro, Ohio, and Lake Orion, Michigan, as well as several surrounding communities. ABS is dedicated to building a diverse, local workforce, leveraging state and local, non-profit, and academic partners in Ohio and Michigan. In addition, LPO works with all borrowers to create quality jobs with strong labor standards during construction, operations, and throughout the life of the loan including developing strong Community Benefits Plans. The project site is near disadvantaged communities and is expected to benefit local communities and local workers, aligning with the Biden-Harris Administration’s Justice40 Initiative, which set the goal that 40 percent of the overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.
The announcement is a conditional commitment issued under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. Through the ATVM program, LPO finances U.S. manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy and helps to achieve the Biden–Harris Administration’s goal that half of all new vehicles sold in 2030 are zero-emissions vehicles.
While this conditional commitment demonstrates the Department’s intent to finance the project, several steps remain for the project to reach critical milestones, and certain technical, legal, environmental, and financial conditions must be satisfied before the Department issues a final loan.
Courtesy of U.S. Department of Energy.
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