An electric vehicle battery component plant under construction in Indiana is lined up to receive a boost from the U.S. Energy Dept. The agency's Loans Program Office has reached conditional terms with Entek Lithium Separators LLC on a $1.2-billion loan for the project, officials announced July 9.

Entek is building the 1.4-million-sq-ft plant in Terre Haute to manufacture wet-process lithium-ion battery separators for EV batteries. Work on the project led by design-build contractor Clayco is already underway, with utilities work and building pad preparation in progress, Kimberly Medford, president of manufacturing at Entek, said via email. 

Clayco, which Entek named as its contractor for the work last year, has said it plans to self-perform concrete work, in addition to providing design, engineering and procurement services. 

If the loan is finalized, it would come from DOE’s Advanced Technology Vehicles Manufacturing loan program. which was created through the Energy Independence and Security Act of 2007 and has loaned $8 billion so far to support projects focused on manufacturing fuel-efficient vehicles. The program is open to manufacturers planning to build, expand or modernize facilities to produce applicable vehicles or their components. The loans can support up to 80% of a project’s cost with favorable interest rates tied to the U.S. Treasury. The program also plays into the Biden Administration goal of onshoring and re-shoring manufacturing in the U.S. 

DOE estimates that annual North American EV battery production will require between 7 billion and 10 billion sq m of battery separator by 2030 as such vehicles become more widely adopted. The Entek facility is planned to have an annual capacity of 1.72 billion sq m, which department officials estimate would be enough to supply between 1.3 million and 1.9 million vehicles, depending on specific batteries that the material is used in. 

“With this announcement, the U.S. is now on a clear path to having enough operating and planned battery manufacturing capacity to meet the president’s goals on electric vehicle and plug-in hybrid sales by 2030,” says Jigar Shah, loan programs office director.

Entek, which claims to be the only U.S.-owned and -operated wet process battery separator, says the process yields advantages in battery separators performance. The firm says it can work with battery manufacturers to customize characteristics of separators.

Entek has an agreement with Kore Power Inc. to supply battery separators from the Terre Haute plant for the manufacturer's under-construction Arizona KOREPlex EV battery cell plant. Last year, the department also announced it would loan Kore as much as $850 million to support that project. 

Shah says it can be hard for growing manufacturers to get financing from the commercial banking sector, but all companies selected for the Loan Programs Office conditional financing have been able to successfully raise equity. 

“There’s a lot of equity providers who really respect our process," he says, adding that they realize that if a manufacturer can get through it, that firm is "a good investment for them to spend time on.”