DOE approves $850M conditional loan for battery plant

Oct 15, 2023

The Department of Energy on Friday announced the approval of a conditional loan guarantee of up to $850 million for an electric vehicle and advanced battery cell manufacturing facility in Arizona, part of the Biden administration's ongoing efforts to boost and shore up supply chains tied to an energy transition.

DOE's Loan Programs Office said it signed off on the conditional commitment to help KORE Power Inc., an Idaho-based battery cell technology development company, to boost EV battery production as the nation moves to meet more rigorous clean car standards and slash emissions.

Jay Bellows, KORE's president, said in an interview that the loan would accelerate the build-out of the factory and save the company's resources compared with raising capital from private markets. "Having the DOE behind us in that process is reassuring and reconfirming," he said.

The project "is essential to the Biden-Harris Administration's strategy to onshore EV supply chains to ensure that half of all new vehicles sold domestically in 2030 are zero-emissions vehicles," DOE said in a statement.

The loan, approved under DOE's Advanced Technology Vehicles Manufacturing Loan Program, would be used to construct an advanced battery cell manufacturing facility in Buckeye, Ariz. — a 1.33 million-square-foot facility called "KOREPlex" that will host production lines to manufacture EV batteries and energy storage systems.

This is the seventh conditional commitment DOE has made through the loan program in the past year. It supports projects that can produce EVs, qualifying components and materials that improve fuel economy.

The Arizona plant will specifically produce batteries using nickel manganese cobalt and lithium-ion iron phosphate chemistries.

The annual production capacity will be 6 gigawatt-hours, which could power over 28,000 EVs annually, according to DOE.

Production may expand to 12 GWh to meet market demand with delivery expected for the end of 2024 or early 2025.

"We are focused on building a facility where American workers will build the battery cells that power our energy and mobility future," said Lindsay Gorrill, founder and CEO of KORE.

DOE said that while the conditional commitment shows the agency's intent to finance the project, several steps remain for the project to reach critical milestones, and certain conditions must be satisfied before the agency issues a final loan.

KORE expects construction of the facility to generate 700 jobs, while the facility itself is estimated to create 1,250 jobs when operating at capacity.

Arizona Sens. Kyrsten Sinema (I) and Mark Kelly (D) celebrated the new development in the company announcement.

"Today's announcement creates strong careers for everyday Arizonans, boosts national security by reducing reliance on foreign nations, and strengthens America's energy independence and leadership," Sinema said in the statement.