US commits to $7.54 billion loan for Stellantis venture to build 2 electric vehicle battery plants

DETROIT (AP) — A Stellantis joint venture with Samsung SDI has won a commitment from the U.S. government for up to a $7.54 billion loan to help build two electric vehicle battery plants in Kokomo, Indiana.

The project being built by StarPlus Energy LLC is expected to create at least 2,800 jobs at the plants and hundreds more at a nearby park for parts supply companies, the Energy Department said Monday in a statement.

The loan still must be finalized, but the government said the commitment shows its intent to finance the project. To get the loan, StarPlus must develop a plan to engage with community and labor leaders to create good paying jobs. It also has to meet technical, legal, environmental and financial conditions before the government will fund the loan.

It's unclear whether the loan will be finalized before President-elect Donald Trump takes office on Jan. 20. On the campaign trail, Trump pledged to end funding for such projects, which he called the “green new scam.” A message was left Monday seeking comment from the Trump transition team.

The Energy Department didn't directly answer a question about whether the loan would be funded before the inauguration, but said it would be irresponsible for "any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities” from the loans.

The plants would make battery cells and modules for electric vehicles to be sold in North America, the department said. At full capacity, the plants will produce enough batteries to supply about 670,000 vehicles per year.

“This will greatly expand EV battery manufacturing capacity in North America and reduce America's reliance on adversarial foreign nations like China,” the statement said.

If finalized, Stellantis would get $6.85 billion in principle plus $688 million in interest for the project.

Late last month electric vehicle maker Rivian Automotive got a $6.6 billion loan to build a factory in Georgia that has stalled as the startup has struggled to make a profit.

The loan announcement comes one day after Stellantis confirmed that CEO Carlos Tavares is stepping down after nearly four years in the top spot of the carmaker that owns brands such as Jeep, Ram and Citroën and Peugeot. The world’s fourth-largest automaker announced that its board accepted Tavares’ resignation Sunday, effective immediately, amid a continued struggle with slumping sales.

The company says a new interim executive committee, led by Chairman John Elkann, will be established while a CEO search is underway.