Ultium Cells, a joint venture between General Motors and LG Energy Solution, received final approval on Monday for a $2.5 billion loan from the Department of Energy to help fund three new battery plants in the U.S.

The locations for the plants include Warren, Ohio; Spring Hill, Tennessee; and Lansing, Michigan, with 6,000 jobs expected to be created during the construction phase and 5,100 jobs when the plants are at full capacity.

The Warren plant is already producing its first batteries, with initial work on the site having been completed in August. The Spring Hill and Lansing plants are scheduled to be ready in 2023 and 2025, respectively. The three plants will have the capacity to supply batteries for the production of one million EVs annually, according to Ultium Cells.

The loan is part of the original $25 billion Advanced Technology Vehicles Manufacturing program started in 2008 during the height of the global financial crisis. In addition to this existing program, the Biden Administration last year passed an infrastructure bill that includes $7.5 billion for EV charging infrastructure and more than $7 billion for the supply chains necessary for batteries, components, materials, and recycling. The administration is laying the groundwork for its goal to see the country reach net zero emissions by 2050 and for EVs to make up half of all new vehicle sales by 2030.

General Motors Ultium batteries

General Motors Ultium batteries

The DOE loan will be paid back by Ultium Cells with income generated on sales of batteries to GM and other companies, such as Honda and Cruise, using GM's Ultium EV toolset. Honda will use Ultium for its upcoming Prologue SUV and an SUV from Acura. Cruise will use it for its Origin self-driving shuttle.

GM Energy, GM's new business launched in October to cater to energy-related services built around EVs and their batteries, will also likely be a buyer of the batteries.

Ultium Cells' batteries feature large-format, pouch-style cells consisting of a nickel-cobalt-manganese-aluminum chemistry. The cells are unique in the industry in that they can be stacked vertically or horizontally within a battery pack. The design provides engineers with more flexibility when it comes to fitting batteries into various vehicle types.

News of the loan coincides with an announcement by GM earlier this year that it has contractually secured battery raw materials for production of one million EVs annually by 2025.