U.S. Energy Department Announces $1.3 Billion Loan for EV Battery Separator Plant in Indiana

The U.S. Energy Department, on Nov. 22, finalized a $1.3 billion loan to ENTEK Lithium Separators LLC to expand its manufacturing of lithium-ion battery separators. The loan will support ENTEK’s new manufacturing site in Terre Haute, Indiana, and boost the domestic supply chain of lithium-ion EV batteries. The department announced the conditional loan guarantee for ENTEK in July this year.

Once operational, the Indiana facility will have an annual manufacturing capacity of 1.72 billion square meters of separator material for the domestic market. With this capacity, the project could support around 1.9 million mid-size EVs or 1.3 million eSUVs, based on the department’s analysis.

Battery separators are an integral part of lithium-ion EV batteries, as they act as a physical barrier between the battery’s anode and cathode. This ensures ionic conduction only occurs through the electrolyte and does not short-circuit the battery cell. One GWh of cell manufacturing utilizes 7-10 million square meters of battery separator.

ENTEK is the only manufacturer of “wet-process” lithium-ion battery separator materials in the U.S. ENTEK can also offer customizable battery separator solutions for different EV battery designs. Lithium-ion battery manufacturers could also use ENTEK’s separators for energy storage applications.

ENTEK’s facility will significantly bolster EV battery separator production in the U.S. The department predicts that by 2030, the demand for EV battery separators in the North American market will reach 7 to 10 billion square meters per year.

ENTEK’s battery separators will also aid U.S. EV manufacturers qualify for battery component sourcing requirements in the 30D Clean Vehicle Credit. The tax credit is a provision in the 2022 Inflation Reduction Act, providing eligible participants with an incentive of up to $7,500 for new electric vehicle purchases.

The loan is offered through the Advanced Technology Vehicles Manufacturing Loan Program, which aims to expand domestic advanced vehicle technology to reduce emissions and improve fuel economy. Recently, the program made several efforts to bolster the domestic production of lithium-ion EV batteries. At the end of October, the department closed a $2.26 billion loan to Lithium Americas Corp for a lithium processing facility in Nevada.