Jigar Shah, Director of the Loan Programs Office, dives into how the DOE Loan Programs Office (LPO) is supporting U.S. advanced vehicle component projects in line with the Biden Administration’s clean energy goals.
November 7, 2024
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In this post, I’ll explore how the U.S. Department of Energy's Loan Programs Office (LPO) is supporting advanced vehicle component projects.
Automakers’ commitment to increasing the average efficiency of their annual vehicle offerings has led to noticeable year-over-year declines in CO2e emissions from on-road transportation over the past two decades. In recent history, nascent growth in light-duty market share for electric vehicles (EVs) began leading improvements in average vehicle efficiency as incremental internal combustion engine (ICE) improvements slowed. Today, along with an EV market that continues to grow, advanced component innovations now drive increases in average efficiency, in many cases offering enhanced vehicle performance with less mass or material. Over the next 30 years, efficiency improvements could reduce EV’s average electricity consumption per mile by half, recent modeling suggests.
The basic EV powertrain – which includes the battery pack, traction motor, full-vehicle wiring, power electronics, and thermal management systems – contains relatively few components compared to ICE vehicles. Though they are fewer, each of these components contain many subcomponents that rely on the superior electrical properties of their constituent materials. Most of these materials are processed from the limited pool of raw materials the Biden-Harris Administration has identified as critical, but not all. For select subcomponents like the battery separator or assembled cells, novel manufacturing techniques that enhance mechanical properties drive innovation as much as or more so than material chemistries. As evidenced by the Office of Manufacturing and Energy Supply Chains (MESC)’s September 2024 grant announcements, the private sector is hungry to develop capacity for these, along with the rest of the battery supply chain, here in the United States.
Of the $3 billion of federal investment in DOE MESC’s September 2024 selectees, roughly $475 million was announced to projects across 6 states to manufacture non-electrode battery components or to produce battery cells. Battery recycling and production of anodes, cathodes, and their precursors are featured in LPO’s critical materials sector spotlight, which comprise the rest of the announcements, including an additional $1.82 billion awarded across 14 projects in 2022.
While EVs have a spotlight for their consumer applications, the return on any innovation boils down to the importance of the component to a particular type of advanced vehicle. For instance, though power electronic innovations are particularly impactful for EVs, estimated to contain twice as many semiconductors by weight as conventional vehicles, they may also contribute to increased efficiency for vehicle types beyond EVs, such as hydrogen fuel cell and even ICE.
Supply chains that support alternatives to battery electric will continue to grow as technology markets mature. Clean fuel alternatives like hydrogen, biomass-derived fuels, and sustainable petrochemical replacements will be necessary to decarbonize medium- and heavy-duty vehicles as well as non-road sectors like aviation and maritime. Across vehicle technologies, Inflation Reduction Act tax credits are incentivizing advanced automotive manufacturing and clean fuel production to onshore to the United States. The domestic content bonuses across many of these credits are making the option similarly irresistible for advanced component manufacturers.
By and large, LPO’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program is the most popular program for manufacturers of advanced vehicle components. ATVM can support manufacturing facilities for the manufacture of qualifying components for on-road light-duty, medium-duty, and heavy-duty vehicles that support and meet specific reduction standards for each type, as well as for non-road transportation like trains, maritime vessels, aircraft and hyperloop technology that meet zero or low emission thresholds. The Title 17 Clean Energy Finance Program may also be able to support an advanced vehicle component manufacturing project, but the additional requirements of these programs and higher costs compared to ATVM mean that in practice, most eligible borrowers prefer ATVM for their project. The most common reason applicants in this space choose to apply to another program over ATVM is when they expect project output will be used primarily in non-vehicle applications—the strategic decision of an applicant manufacturing rare earth magnets to court an offtaker for wind power applications rather than for use in EV motors, as one general example. LPO’s Outreach team is happy to discuss the best program fit for a potential project.
As of the end of June 2024, financing requested from LPO for Advanced Vehicle and Component projects totaled $16.8 billion. For more current details, view LPO’s Monthly Application Activity Report, which explains the level of interest from applicants for LPO financing and what technology sectors have been most actively engaged with LPO.
Advanced Battery Components – Aspen Aerogels
In October 2024, LPO announced a conditional commitment to Aspen Aerogels Georgia, LLC to help finance the construction of facility in a Register, Georgia to manufacture a protective layer it calls PyroThin® for use in EV batteries. PyroThin® aerogel thermal barriers are ultra-thin and lightweight, designed to slow or prevent rare events in which a battery cell overheats and triggers neighboring cells. Aspen currently fills orders for contracted offtakers at its existing manufacturing plant in Rhode Island and looks to build new capacity as expected demand for the product increases.
PyroThin® offers a unique combination of thermal management, mechanical performance, and fire protection properties, helping EV battery manufacturers reach their safety goals without sacrificing battery performance. In the event a battery cell fails, it protects neighboring cells from being thermally triggered to avoid a significant fire. Demand for aerogel thermal barriers is expected to increase significantly in both the United States and Europe as more stringent thermal mitigation and prevention standards are implemented.
Advanced Battery Components – CelLink
In April 2024, LPO closed a $362 million loan to CelLink Corporation to help finance the construction of a domestic manufacturing facility in Georgetown, Texas. The facility will produce lighter and more efficient flexible circuit wiring harnesses—sets of wires and related equipment that relay information and carry electricity throughout vehicles. Once fully operational, the facility is expected to produce enough wiring harnesses to support the manufacture of approximately 2.7 million EVs per year. At its existing California facility, CelLink has produced wiring harnesses for more than a million vehicles already on the road.
CelLink’s domestically produced “flex harnesses” are lighter, smaller, quicker to produce, and expected to be less expensive than conventional wiring harnesses. The flat design of CelLink’s flex harnesses can reduce vehicle weight, provide better heat dissipation for improved propulsion system efficiency, and lower vehicle manufacturing costs. CelLink’s technology, now in demand in the EV and general automotive markets, has applications across numerous other industries, including aviation and aerospace. Most wire harness production for the U.S. market currently occurs in countries with low labor costs due to the complex manual processes associated with traditional assembly.
Advanced Battery Components – ENTEK
In November 2024, LPO announced the closing of a $1.2 billion loan to ENTEK Lithium Separators LLC (ENTEK). The loan will substantially finance a new facility in Terre Haute, Indiana, to manufacture lithium-ion battery separators, the membrane sandwiched between the anode and cathode of a battery. The separators will be used primarily in EVs—strengthening the U.S. lithium-ion battery cells supply chain and enabling the creation of batteries used in advanced technology vehicles.
A battery separator plays an essential role in the performance and safety of lithium-ion batteries. The project will make a significant contribution to growth in domestic battery separator capacity and help U.S. EV manufacturers satisfy battery component sourcing requirements under the 30D Clean Vehicle Credit. ENTEK will be able to customize battery separators to accommodate numerous EV battery designs as well as all existing lithium-ion EV battery chemistries.
Advanced Battery Components – SK Siltron
In October 2024, LPO, announced the closing of a $544 million loan to SK Siltron CSS, LLC to expand American manufacturing of high-quality silicon carbide (SiC) wafers for EV power electronics in Bay City, Michigan. The facility is projected to be among the top-five manufacturers of SiC wafers globally.
SiC semiconductors are designed for high-voltage use and are critical components of EV drivetrains, including inverters, and electrical distribution systems like onboard chargers and DC-to-DC converters. SiC semiconductors allow for higher efficiency and higher voltage, which can mean faster charging times and up to 10% longer range when compared with traditional silicon semiconductors. High-quality wafers are currently under-supplied, and demand is expected to rise with EV sales, which saw unprecedented progress in 2023.
Battery Manufacturing – BlueOval SK
In December 2024, LPO announced the closing of a $9.63 billion loan to Blue Oval SK LLC to construct three manufacturing plants—one located in Tennessee and two in Kentucky. BOSK is a joint venture between Ford Motor Company (Ford) and SK On, a global leading Korean EV battery manufacturer.
The United States is experiencing strong growing consumer demand for EVs, which will necessitate the production of more EV battery cells. This project will help build a more resilient domestic supply chain to meet this growing EV demand. The project will enable more than 120 gigawatt hours of U.S. battery production annually and displace more than 455 million gallons of gasoline per year for the lifetime of the vehicles powered by these batteries.
Battery Manufacturing – StarPlus
In December 2024, LPO announced the closing of a $7.54 billion loan to StarPlus Energy LLC (StarPlus Energy). The loan, if finalized, will help finance up to two lithium-ion battery cell and module manufacturing plants in Kokomo, Indiana. The output from the new facilities will be sold to Stellantis for use in electric vehicle (EV) models that will be sold in North America—helping ensure the United States can meet domestic demand and remain a global leader in the rapidly expanding EV industry.
At full capacity, the StarPlus project will produce about 67 GWh of batteries, enough to supply approximately 670,000 vehicles annually. DOE estimates the EVs produced using StarPlus batteries will displace the usage of 260.3 million gallons of petroleum per year—helping to slash harmful pollutants that jeopardize public health and pollute local ecosystems.
Battery Manufacturing – Ultium Cells
In December 2022, DOE announced the closing of a $2.5 billion loan to Ultium Cells LLC to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. Ultium Cells, a joint venture between General Motors and LG Energy Solutions, will manage battery cell production at the three facilities, as a critical move to address the growing demand for EVs.
Ultium’s large format, pouch-type cells use a state-of-the-art chemistry to deliver more range at a lower cost. Cells can be arranged in different combinations to provide clean, reliable energy for all vehicles on the road today, including pickups, SUVs and other family vehicles, as well luxury vehicles and commercial vehicles. Ultium Cells plans to use this technology in coordination with GM’s work to eliminate 100% of tailpipe emissions from its new U.S. light-duty vehicles by 2035.
Battery Recycling – Li-Cycle
In November 2024, LPO announced the closing of a of a $475 million loan to Li-Cycle U.S. Inc. (Li-Cycle). The loan will help finance the construction of a first-of-its-kind lithium-ion battery resource recovery facility in Rochester, New York. The loan will help Li-Cycle—a leading global lithium-ion battery resource recovery company—further expand its domestic operations. Li-Cycle will aggregate source material (end-of-life lithium-ion batteries and battery manufacturing scrap) and process it into a feedstock called “black mass” at three “Spokes,” across North America – in Rochester, New York; Gilbert, Arizona; and Tuscaloosa, Alabama. The black mass will then be sent to the Rochester “Hub” facility for additional processing.
Li-Cycle expects its Rochester “Hub” facility to be a significant source of recycled battery-grade lithium carbonate in North America. The facility’s output will promote the electrification of the U.S. automotive fleet and is expected to support the battery needs of approximately 180,000 EVs annually at peak operations. This quantity of EVs would reduce gasoline use by up to 71 million gallons per year, equivalent to more than 633,000 metric tons of CO2 emissions annually.
EV Charging – EVgo
In October 2024, LPO announced a conditional commitment to EVgo Swift Borrower LLC for a loan guarantee of up to $1.05 billion to expand public EV charging infrastructure. If finalized, the loan guarantee will support EVgo’s deployment of approximately 7,500 charging ports at roughly 1,100 charging stations across the United States, including many at leading retail centers and grocery store chains. The first deployments will include high-power 350kW fast chargers capable of charging two EVs simultaneously, and EVgo plans to continue installing power sharing equipment over the 5-year deployment timeline.
EVgo’s public charging services will support equitable EV growth and ownership, particularly in metropolitan areas expected to experience the fastest growth. While EV drivers who live in single-family homes can charge their cars overnight, people who live in multi-family housing may not have access to home charging and would benefit the most from fast charging. EVgo’s chargers would be compatible with all new EVs capable of fast charging and can reach 80% charge from empty in as little as 20 minutes.
News Roundup
- US silicon carbide wafers just got a big boost – here's why it matters for EVs (Electrek)
- Super-light materials that help suppress EV battery fires just got a big boost (MIT Technology Review)
- Why DOE is funding a wiring company you've never heard of (Latitude Media)
- VP Harris in Detroit: New $100 million coming to help auto parts makers prep for EVs (The Detroit News)
- Biden admin offers $1.2B loan [conditionally to Entek] to expand US battery supply chain (Canary Media)
- Biden administration announces $2.5 billion loan to help GM and LG make EV batteries (CNN)
- Ford-SK venture to get $9.2 billion US loan for battery plants (Reuters)
- DOE announces $15.5B to support electric vehicle transition, grow domestic battery manufacturing (Utility Dive)
- EVgo CEO Badar Khan on extending its EV infrastructure, expanding charging and outlook (CNBC)
This blog was originally published on August 5, 2024, and is periodically updated.
Jigar Shah
Former Director, Loan Programs Office
Jigar Shah served as Director of the Loan Programs Office (LPO) at the U.S. Department of Energy (DOE) from March 2021 to January 2025. He led and directed LPO’s loan authority to support deployment of innovative clean energy, advanced transportation, and Tribal energy projects in the United States. Prior, Shah was co-founder and President at Generate Capital, where he focused on helping entrepreneurs accelerate decarbonization solutions through the use of low-cost infrastructure-as-a service financing. Prior to Generate Capital, Shah founded SunEdison, a company that pioneered “pay as you save” solar financing. After SunEdison, Shah served as the founding CEO of the Carbon War Room, a global non-profit founded by Sir Richard Branson and Virgin Unite to help entrepreneurs address climate change.
Shah was also featured in TIME's list of the "100 Most Influential People" in 2024.
Originally from Illinois, Shah holds a B.S. from the University of Illinois-UC and an MBA from the University of Maryland College Park.