General Motors CEO Mary Barra. (Steve Fecht)

The U.S. Department of Energy (DOE) says it will loan $2.5 billion to Ultium Cells, a joint venture of General Motors (GM) and LG Energy.

It’ll support the construction of three new lithium-ion cell manufacturing facilities in Ohio, Tennessee, and Michigan.

If finalized by the DOE’s Loan Programs Office, the loan could be the first of its kind in more than a decade.

Early in the Obama administration, similar federal loans were used to build factories by Nissan and Tesla.

This specific loan will be the first exclusively for a battery cell manufacturing project under the Advanced Technology Vehicles Manufacturing program.

In a statement, Jigar Shah, the director of the LPO, called the loan “the latest proof point of the Department’s ongoing efforts to help build a domestic supply chain to meet the growing demand for electric vehicles. These new manufacturing facilities will create thousands of good-paying jobs across three states while enabling improvements in existing lithium-ion battery technologies.”

Automakers are increasingly looking to manufacture their battery cells to support the ever-growing electric vehicle production trend.

Toyota and Ford are also building battery plants, Volkswagen is eyeing U.S. production, and as we know, Tesla has Gigafactories in Nevada and New York.

Ultium Cells will supply GM as it works to convert its light-duty fleet to all-electric by 2035.

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