U.S. Energy Department Commits $850 Million Loan for Advanced Battery Manufacturing Facility

The U.S. Energy Department’s Loan Programs Office on June 9 announced a conditional commitment of an $850 million loan intended to provide financial support for the construction of KORE Power Inc.’s advanced battery cell manufacturing facility in Buckeye, Arizona. The facility, named “KOREPlex,” would bolster the domestic battery supply chain by increasing the battery cell manufacturing capacity for energy storage systems and electric vehicles. The move aligns with the Justice40 Initiative, which aims to ensure 40 percent of benefits of climate and energy investments go to disadvantaged communities.

KOREPlex is projected to have an annual battery cell storage capacity of 6 gigawatt hours, capable of powering more than 28,000 electric vehicles and displacing approximately 11.8 million gallons of gasoline annually. This undertaking is expected to generate up to 700 jobs during the construction phase and create 1,250 operational jobs.

Among other recent actions to support the EV market, the Biden administration has finalized the Build America, Buy America implementation plan for EV charging equipment and announced the first public and private commitments to support electrification efforts under the EV Acceleration Challenge. The U.S. Treasury Department and the Internal Revenue Service have released proposed guidance on the new clean vehicle provisions of the 2022 Inflation Reduction Act aimed to spur manufacturing in the U.S., and strengthen supply chains. Since the passage of the act, at least $45 billion in private-sector investment has been announced across the U.S. clean vehicle and battery supply chain.

As part of its commitment to fostering the next generation of clean energy workers, KORE Power will collaborate with nearby institutes and tribes to provide training opportunities for local workforce members seeking operational roles. The facility, which is a part of the Advanced Technology Vehicles Manufacturing, or ATVM, Program, plays a vital role in the Biden administration’s strategy to onshore EV supply chains to ensure that zero-emission vehicles comprise half of all new vehicle sales in the country by 2030.

EVs are gaining market share, driving the need for advanced batteries. Onshoring battery manufacturing reduces reliance on foreign sources like China. The KOREPlex facility will meet growing domestic demand for batteries and support the electrification of the transportation sector. In a market where lithium-ion batteries are expected to increase rapidly in the next ten years, the department’s initiative is expected to prepare the country to meet market demands. The funding will build new production capacity and expand domestic facilities for battery recycling and the processing of allied materials and new battery manufacturing.

The facility, spanning an area of 1,330,000-square feet, is designed to house two production lines to manufacture batteries for EVs and energy storage systems. The project will focus on two unique battery cell chemistries, which include nickel manganese cobalt chemistry and lithium-iron phosphate that does not utilize cobalt, and could reduce the dependence on foreign supply chains use of the critical material. The company’s strategy includes a focus on smaller automotive manufacturers requiring lower production volumes, in a bid to provide higher levels of service in comparison to other battery makers.

This marks the seventh conditional commitment through the ATVM program in the past year, supporting projects focused on EVs and fuel economy improvements. The department conducts rigorous due diligence on all aspects of potential deals, including evaluating any connections between borrowers/sponsors and foreign governments. While the conditional commitment signifies the department’s intent to finance the project, there are additional steps, milestones, and conditions that must be fulfilled for the final loan to be issued.