U.S. Energy Department Announces $670 Million Conditional Loan Commitment for Manufacturer of EV Battery Thermal Barriers

The U.S. Energy Department on Oct. 16 announced a conditional commitment for a direct loan of up to $670.6 million to Aspen Aerogels Georgia LLC to manufacture thermal barriers used as a protective layer within electric vehicle batteries. The loan would support the development of a manufacturing site in Georgia to produce Aspen’s PyroThin® aerogel thermal barriers for EV batteries.

Once operational, the factory is expected to manufacture aerogel thermal barriers for over 2 million electrical vehicle batteries per year. Based on incremental fuel savings, this facility can help reduce 8,000 tons of carbon emissions annually. Aspen’s ultra-thin, lightweight thermal barriers are designed to slow or prevent “thermal runaway propagation,” a rare instance where an overheating battery cell triggers nearby cells, potentially causing a fire.

Upon final approval, Aspen Aerogels would receive the funding through the Advanced Technology Vehicles Manufacturing Loan Program. Aspen has signed multi-year contracts with major EV manufacturers, including General Motors, Toyota, and Audi, to supply aerogel blankets for EV batteries. The company is currently fulfilling orders and producing prototypes at its Rhode Island plant. The new Georgia facility, backed by a conditional commitment, will help Aspen meet growing demand and support future agreements.

The funding is a key part of the Biden administration’s Investing in America agenda which seeks to strengthen the U.S. domestic electric vehicle supply chain. Over the years, the U.S. has depended on imports of EV batteries and components to meet its growing EV demand. To counteract this, the administration has made extensive efforts to bolster the domestic EV supply chain.

In July, the department announced $1.7 billion in funding to renovate or retool existing EV manufacturing facilities. Last year, the department also announced a similar conditional commitment for a $850 million loan to an advanced battery cell manufacturing site in Arizona.