Biden Administration Supports Stellantis-Samsung Battery Factories with Billion-Dollar Loans

The Biden administration announced on Monday a $6.85 billion loan to StarPlus, a joint venture between U.S. automaker Stellantis and South Korea’s Samsung SDI, to build electric vehicle (EV) battery factories in Indiana. This latest initiative is part of Biden’s broader climate agenda, aimed at ramping up EV production in the U.S.

With just weeks remaining in office, President Joe Biden has been accelerating loans to EV manufacturers. The administration recently approved a $6 billion loan to Rivian for a factory in Georgia, despite the company’s ongoing financial struggles. Rivian’s valuation has plummeted from $150 billion three years ago to around $10 billion today.

The Indiana plants, expected to produce batteries for 670,000 vehicles annually, will employ approximately 3,000 people. According to the Department of Energy, the project aims to reduce U.S. reliance on foreign nations like China for EV battery production.

“This investment will greatly expand E.V. battery manufacturing capacity in North America and reduce America’s reliance on adversarial foreign nations like China,” the Department of Energy’s Loan Programs Office said.

Stellantis, which owns Jeep, Chrysler, Dodge, and Ram, as well as Fiat and Peugeot, has faced internal turmoil. CEO Carlos Tavares abruptly resigned on Sunday over “different views” with the board of directors, adding uncertainty to the company’s future.

Despite these investments, EV demand in the U.S. remains tepid. A report from consulting firm McKinsey & Co. found that 46% of Americans who purchased an EV regretted switching from a gas-powered vehicle.

This aligns with broader skepticism about Biden’s push to ensure that half of all vehicles sold in the U.S. by 2030 are electric. Tax credits and EV incentives have been central to this strategy, but their future is uncertain as President-elect Donald Trump prepares to take office.

Trump has been openly critical of Biden’s EV agenda, signaling he may scrap tax credits and subsidies for EV buyers. Tesla CEO Elon Musk, a Trump ally, has also voiced opposition to such incentives, saying, “Taking away the subsidies … will only help Tesla.”

Loan agreements between the federal government and manufacturers like Rivian and StarPlus are expected to be finalized before Trump’s inauguration on January 20, 2025, making them legally binding. However, Trump’s administration could shift the focus away from EVs, raising questions about the long-term viability of these investments.

Since taking office, the Biden administration has loaned $34 billion to automakers like Stellantis, Rivian, and Ford for low-emission or zero-emission vehicle projects. While proponents argue these investments are critical to combating climate change and reducing reliance on foreign energy, critics see them as wasteful subsidies in a market that has yet to gain widespread consumer support.

With Trump’s incoming administration poised to reverse course, the fate of Biden’s EV legacy hangs in the balance.

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