GM Inside News Forum banner
1 - 20 of 69 Posts

·
Premium Member
News Contributor
Joined
·
5,925 Posts
Discussion Starter · #1 ·
Ultium Cells Receives $2.5B Department of Energy Loan Commitment
Business Journal
Monday July 25, 2022

WASHINGTON — The U.S. Department of Energy’s Loan Programs Office announced today a conditional commitment to Ultium Cells LLC for a $2.5 billion loan to help finance the construction of new lithium-ion battery-cell manufacturing facilities in Ohio, Tennessee, and Michigan.

Production at Ultium’s $2.3 billion manufacturing plant in Lordstown is scheduled to begin in less than three weeks. Capacity will ramp up as demand for electric vehicles increases.

Ultium, a joint venture between General Motors Co. and Korea-based LG Energy Solution, is also building a second plant in Spring Hill, Tenn. and plans to construct a third factory in Lansing, Mich.

Once full capacity is reached, the three facilities are expected to create 6,000 good-paying construction jobs and 5,100 operations jobs, according to Jigar Shah, director of the Loan Programs Office.

A fourth plant is also planned, but a site has not been publicly identified.

The loan is part of the Department of Energy’s Advanced Technology Vehicles Manufacturing, or ATVM, program, Shah said. The program supports the domestic manufacturing of light-duty vehicles, qualifying components, and materials that improve fuel economy.
*Full Article at Link
 

·
Registered
Joined
·
2,349 Posts
"Production at Ultium’s $2.3 billion manufacturing plant in Lordstown is scheduled to begin in less than three weeks. Capacity will ramp up as demand for electric vehicles increases."

This bodes well for all of GM's new EV releases.
 

·
Registered
Joined
·
3,329 Posts
Didn't GM already announce all of the plants will be built in the USA? So why do they need special government loans?

I'm fine with the government fostering the building of high tech industry in the USA, but I feel like something isn't quite right with this.
It does say loan as a posed to a handout.
 

·
Registered
Joined
·
21,389 Posts
It does say loan as a posed to a handout.
Yes - I did see that, but presumably this is a low or no interest rate loan. It's nice for GM, but is it necessary? My point being, I don't think this alters GM's plans and presumably they could get their own loans or even self fund the cost. Out of all the government waste, this is probably minor as the government, the people, should get the money back. But, how much interest is the government paying on government debt? Meaning the government is running a huge deficit, so for all intents the government had to borrow money to make this loan - what is the government paying in interest vs. the rate on the loan to GM?
 

·
Premium Member
Joined
·
36,959 Posts
Didn't GM already announce all of the plants will be built in the USA? So why do they need special government loans?

I'm fine with the government fostering the building of high tech industry in the USA, but I feel like something isn't quite right with this.
I'm going to check with Pauly P and I'll get back to you. Meanwhile I have some investments to make.
 

·
Registered
Joined
·
18,746 Posts
Didn't GM already announce all of the plants will be built in the USA? So why do they need special government loans?

I'm fine with the government fostering the building of high tech industry in the USA, but I feel like something isn't quite right with this.
Ultium LLC is a different company. Shielding GM from potential fallout in events of recalls I can assume.
 

·
Registered
Joined
·
542 Posts
But, how much interest is the government paying on government debt?
The Government isn't paying anything. The government is essentially co-signing the loan. If GM goes out of business then the Government pays the loan. This lowers the risk to the lenders to near zero and lowers interest rates. The government agency that makes the guarantee has to have a reserve of cash, just in case. Presumably, that reserve is making some low amount of interest.

GM applied for these loans years ago before the decision was made to place the factory in the USA. Today was the final approval after many steps.
 

·
Registered
2014 BMW 320i; 2015 Chevy Spark EV (wife's car)
Joined
·
4,764 Posts
Yes - I did see that, but presumably this is a low or no interest rate loan. It's nice for GM, but is it necessary? My point being, I don't think this alters GM's plans and presumably they could get their own loans or even self fund the cost.
Yikes. There are still people who will call GM, Government Motors forever. Not a solid look for the company and to be tied to an "green energy" loan.
The relevant loan program in this case is U.S. Department of Energy Advanced Technology Vehicles Manufacturing Loan Program (ATVM).

Here is a summary of ATVM:
  • It is a government subsidized loan program originally created to help automotive manufacturers meet the Corporate Average Fuel Economy (CAFE) goal of 35 mpg by 2020
  • As of 2022, the loan program has been in existence for about 15 years, having been established by the 2007 Energy Independence and Security Act (EISA)
  • It putatively targets startup companies in the automotive industry (both automakers and suppliers) who are in the process of transitioning from initial product conception to mass production
  • In practice, almost any automaker or supplier can apply for an ATVM loan. In fact, the two companies receiving the largest loans under the program were Ford and Nissan. Ford just paid off its loan in June 2022, almost 13 years after borrowing the money.
  • As far back as 2011, the Government Accountability Office found that ATVM lacked the expertise to properly monitor loan recipients, and even lacked the ability to measure how much the loans contributed to successfully meeting the stricter 2020 CAFE standards - the rationale used to justify creating ATVM in the first place.
  • Like all government subsidized loan programs, ATVM had its share of spectacular failures. The most notable is probably Fisker Automotive, which defaulted on its ATVM loan and declared bankruptcy in 2013.
Q&A:
  1. Is the ATVM loan necessary for GM or Ultium LLC? Answer: No.
  2. Is ATVM an example of corporate welfare at its worst? Answer: Yes.
  3. When should DOE discontinue ATVM? Answer: Yesterday.
  4. Should DOE be abolished completely? Answer: Yes.
 

·
Registered
Joined
·
22,388 Posts
Didn't GM already announce all of the plants will be built in the USA? So why do they need special government loans?

I'm fine with the government fostering the building of high tech industry in the USA, but I feel like something isn't quite right with this.
Good lobisyist?

General Motors Lobbying Profile • OpenSecrets

Ultium LLC is a JV — 50-50 ownership between GM and LG.
So essentially South Korea gets 1/2 the benefit?
 
  • Like
Reactions: Rumpole and gkr778

·
Registered
Joined
·
45,041 Posts
So essentially South Korea gets 1/2 the benefit?
Not “South Korea” but “LG.” THe company will Benefit, not the country.
It’s a technicality, I know. (And now I sound like my international Business professor... lol)

I don’t know how that 50-50 is divvy’d up tho, in terms of tech sharing, manufacturing lessons learned, profit, risk exposure, etc.
 

·
Registered
Joined
·
2,363 Posts
Speaking of China. GM's ties with SAIC/Wulling. 320,000 "New Energy Vehicles" sounds like a Great Place for Ultium.

SAIC MOTOR
GM is a bit ahead of you, buddy. GM EVs sold in China will be based on Ultium. There is a notable, but yet unexplained difference, in the packaging of Ultium pouch cells in the battery packs of Chinese EVs. In the Chinese cars, the pouches will be folded in hard plastic sheaths which are then stacked to form the pack. In the North American cars, the bare pouches will be stacked for form the pack.
 

·
Registered
Joined
·
4,573 Posts
GM joint venture to receive $2.5B government loan for US battery plants
Rebecca Bellan@rebeccabellan / 11:25 PM GMT+1•July 25, 2022

Comment

bird's eye view of GM's Ultium battery factory under construction in Ohio




Product Font Line Material property Screenshot
 
  • Like
Reactions: TruckMan

·
Registered
Joined
·
3,642 Posts
Yes - I did see that, but presumably this is a low or no interest rate loan. It's nice for GM, but is it necessary? My point being, I don't think this alters GM's plans and presumably they could get their own loans or even self fund the cost. Out of all the government waste, this is probably minor as the government, the people, should get the money back. But, how much interest is the government paying on government debt? Meaning the government is running a huge deficit, so for all intents the government had to borrow money to make this loan - what is the government paying in interest vs. the rate on the loan to GM?
Forgive me, but it appears you're viewing the budget of the US government the same way you might look at a household budget. You speak of government paying interest. Perhaps they do, on paper, but no nation that prints its own currency is ever truly in debt. They create trillions of dollars out of thin air, as they did during the 2008 financial panic. It's not like government needs tax revenues to provide services. Taxes mainly exist at the personal level as a morality exercise and tool of social control.
 

·
Premium Member
Joined
·
11,917 Posts
Forgive me, but it appears you're viewing the budget of the US government the same way you might look at a household budget. You speak of government paying interest. Perhaps they do, on paper, but no nation that prints its own currency is ever truly in debt. They create trillions of dollars out of thin air, as they did during the 2008 financial panic. It's not like government needs tax revenues to provide services. Taxes mainly exist at the personal level as a morality exercise and tool of social control.
They don’t create trillions out of thin air, the money is purchased from the reserve which is not owned by the federal government. Government debt is fast approaching $30 trillion. So debt held by the public is around $23.6 trillion and intragobenment debt is $6.5 Trillion.


Intragovernmental Debt
The Treasury owes this part of the debt to other federal agencies. Intragovernmental holdings totaled more than $6.5 trillion in February 2022.1 Why would the government owe money to itself? Because some agencies, like the Social Security Trust Fund, take in more revenue from taxes than they need. These agencies then invest in U.S. Treasurys rather than stick this cash under a giant mattress,


This transfers the agencies' excess revenue to the general fund, where it's spent. They redeem their Treasury notes for funds as needed. The federal government then either raises taxes or issues more debt to raise the cash.

Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.


Social Security trusts, including the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, held $2.86 trillion in Treasurys as of August 2021. The next largest agency was the Military Retirement Fund at $1.03 trillion. Other large holders of debt include the Office of Personnel Management Retirement, Medicare (which includes the Federal Supplementary Medical Insurance Trust Fund), then cash on hand to fund federal government operations.2


Public Debt
The public holds over $22 trillion of the national debt.3 Foreign governments hold a large portion of the public debt, while the rest is owned by U.S. banks and investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and holders of savings bonds.


The Treasury breaks down who holds how much of the public debt in a quarterly Treasury bulletin. Foreign and international investors held over $7 trillion, according to its September 2021 bulletin, which included data through March 2021. State and local governments held $1.17 trillion and mutual funds had $3.6 trillion.


Other holders of the public debt include insurance companies, U.S. savings bonds, private pension funds, and other holders, including individuals, government-sponsored enterprises, brokers and dealers, banks, bank personal trusts and estates, corporate and non-corporate businesses, and other investors.4
 

·
Registered
Joined
·
3,149 Posts
GM is a bit ahead of you, buddy. GM EVs sold in China will be based on Ultium. There is a notable, but yet unexplained difference, in the packaging of Ultium pouch cells in the battery packs of Chinese EVs. In the Chinese cars, the pouches will be folded in hard plastic sheaths which are then stacked to form the pack. In the North American cars, the bare pouches will be stacked for form the pack.
I guess I was not Clear enough again. The $2.6 Billion Loan, will be better used in China's Enviroment than the USA's, and GM knows this.

It doesn't matter "How" the battery is packed, it is Where it is "Sold". and "How it is Sold".

The Hummer EV makes a Bold Statement of "How Electric can work, but it will make little difference on Putting Electric on the Roads and Streets. Yet the DOE is subsidizing GM for it's efforts, while other American Companies are Actually putting Electrics on the Streets of America.

GM is putting Electrics on the Streets of China, with American Tax Payer's money now..

Why is Mary "Betting the Company" on it Conquering Electric? Because the Bulk of the Company isn't even apartof the Bet, it is still in China's Hands.

The "Difference" in the Battery Packaging is only Part of the Proof.
 
1 - 20 of 69 Posts
Top