US Resurrects Green Energy Loan Program For GM Battery Joint Venture (reuters.com) 32
An anonymous reader quotes a report from Reuters: The U.S. Energy Department on Monday announced it intends to loan a joint venture of General Motors and LG Energy Solution $2.5 billion to help finance construction of new lithium-ion battery cell manufacturing facilities. The conditional commitment for the loan to Ultium Cells LLC for facilities in Ohio, Tennessee, and Michigan is expected to close in the coming months and comes from the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program, which has not funded a new loan since 2010. The plan, first reported by Reuters, would mark the Energy Department's first loan exclusively for a battery cell manufacturing project under the vehicle program.
The program previously provided low-cost government loans to Tesla, Ford and Nissan, which included some cell manufacturing. "We have to have vehicle manufacturing capacity but also battery manufacturing capacity," Jigar Shah, who directs the Energy Department loan program office, told Reuters in an interview. "This project provides one of the newest additions to battery manufacturing scale in this country." [...] Shah said the department has received more than $18 billion in loan requests from the auto program and expects at least another $5 billion in requests that are being actively prepared. "I do think there will more loans issued," Shah said, declining to offer a precise timeline. The program currently has $17.7 billion in lending authority available. Shah said "for motivated borrowers, they can close these loans rather quickly." Reuters notes that GM and LG are investing more than $7 billion via the venture. Production at its Ohio battery plant is expected to begin in August. Production is set to begin at its Tennessee plant in late 2023 and in Michigan in 2024.
The program previously provided low-cost government loans to Tesla, Ford and Nissan, which included some cell manufacturing. "We have to have vehicle manufacturing capacity but also battery manufacturing capacity," Jigar Shah, who directs the Energy Department loan program office, told Reuters in an interview. "This project provides one of the newest additions to battery manufacturing scale in this country." [...] Shah said the department has received more than $18 billion in loan requests from the auto program and expects at least another $5 billion in requests that are being actively prepared. "I do think there will more loans issued," Shah said, declining to offer a precise timeline. The program currently has $17.7 billion in lending authority available. Shah said "for motivated borrowers, they can close these loans rather quickly." Reuters notes that GM and LG are investing more than $7 billion via the venture. Production at its Ohio battery plant is expected to begin in August. Production is set to begin at its Tennessee plant in late 2023 and in Michigan in 2024.
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Well, for one, it's a bit nicer being a loan, granted one that will likely be lower even than inflation, but still it's not *quite* a handout.
For another, there are externalized costs associated with the fossil fuel use that isn't really baked into the cost model of fossil fuel use, so some aid is worthwhile to balance the scales to help BEV mature more quickly.
Besides, the government has given *plenty* of help to the fossil fuel industry along, so it does make some sense to share that love with the BEV.
So
Re:Democrats just can't stop themselves (Score:4, Informative)
The last time the US gave GM a big loan, it didn't work out great [reuters.com] (though they made a mint on their (much smaller) loan to Tesla).
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TFA notes this is the "Advanced Technology Vehicles Manufacturing (ATVM) loan program" and US resurrects green energy loan program that helped put Tesla on the map [theverge.com] notes:
The ATVM program was created by Congress under the administration of former President George W. Bush, allocating $25 billion “to provide low-cost debt capital for fuel-efficient vehicle and eligible component manufacturing in the United States.”
President George W. Bush is a Republican ...
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Republicans live in a fantasy in which the GOP is the party of low government spending and fiscal responsibility.
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Republicans live in a fantasy in which the GOP is the party of low government spending and fiscal responsibility.
Republicans seem to have a lot of fantasies lately...
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President George W. Bush is a Republican ...
Not by current standards.
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President George W. Bush is a Republican ...
Not by current standards.
Unfortunately true.
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If EV's were really viable
Look at these [cleantechnica.com] graphs [insideevs.com]. I'd say Tesla, at least, is showing that EVs are "really viable".
Tesla is on an exponential growth curve. In 2012 they shipped about 2400 cars; in 2022 they will ship over a million cars, and in 2024 they should ship over two million cars. Even in 2022 Tesla now sells more cars than Volvo [just-auto.com], so I'd say Tesla should be regarded as a "real car company".
And Tesla has industry-leading margins [inc.com]. Tesla makes more per car than any of the legacy car companies, and th
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Re:Democrats just can't stop themselves (Score:5, Informative)
A nice graph for where Tesla's income comes from, where it goes, and where its profit comes from [twimg.com]. Note that the energy generation and storage side should get closer to (but not pass) the auto side; it's growing faster, and they're working on a Megapack factory right now that will increase their build rate by an order of magnitude.
A lot of people have misconceptions about where Tesla's market value comes from. It's overwhelmingly owned by institutions (aka, "the smart money"), not retail. It's actually priced well below analyst valuations right now. Analyst valuations generally include almost nothing for FSD. They do discount growth rates, to well below corporate forecasts, and often frankly by ridiculous amounts.
To put it simply, Tesla is valuable because:
* It has high margins and high ASPs.
* As a leading boat on a rising tide, even if it were to fall behind, it's still sailing on a massively rising tide
* Except it's not falling behind at all; it continues to dominate in global BEV sales.
* It's margin story is all the more meaningful because competitors EVs generally have terrible margins - low, zero, or negative. Ford, for example, recently admitted that despite being made in Mexico, the Mach-E has no profit margin at present. As EVs become an increasingly large share of traditional automakers sales, these low margins become a ticking time bomb for them. They MUST somehow close the gap.
* In short, Tesla has become a cash printer relative to its volumes, and it's on a massive volume growth trajectory that - even if heavily discounted - still leads to a huge valuation.
* Unlike other automakers, it has basically no debts or obligations; shareholders actually own virtually the whole company, unlike traditional automakers that are mainly owned by bondholders and have many other (often unfunded) obligations. Market cap is the valuation of the part of the company which you actually own, not the value of the entire company.
Companies are valued by projecting forward, ideally a Monte Carlo simulation of probability-weighted scenarios, with future profits discounted by time. And when analysts do this, they generally get high values for Tesla, even with pessimistic assumptions.
I'd like to note that re: "in 2024 they should ship over 2 million cars" - it should be noted that on the Q2 conference call they stated that they think that by the end of this year they may be up to a weekly run rate of 40k cars, which is an annualized rate of 2 million. Which assuming a standard (actually quite pessimistic) YoY growth rate of 50% would be 2,5M in 2023. Now, that's probably too optimistic, because that doesn't account for downtime, disruptions, etc. But anyone thinking it's going to be only 2 million in 2024 is in for quite a surprise. ;)
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Whoops, replace "million" with "billion" in the above. As in, GM has about 110 billion in debt but made 9.7 billion in 2020, and promises to invest 35 billion in EV technology.
Sorry for the mistake.
"A billion here, a billion there, pretty soon you are spending real money."
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Even in 2022 Tesla now sells more cars than Volvo
I don't disagree on Tesla or EVs, but Volvo was headed for bankruptcy when acquired by Geely...
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Volvo was headed for bankruptcy when acquired by Geely
And now that Volvo is being run by Geely, they are selling over 700K cars per year worldwide.
I'm not really a car guy; I use Google to find my numbers. I haven't found a good page for worldwide car sales but did find this page of US sales only.
https://www.goodcarbadcar.net/2022-us-auto-sales-figures-by-manufacturer/ [goodcarbadcar.net]
Tesla promises to grow their production by at least 50% per year and they have been doing it. They will double their production in the nex
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It's happening. The problem is the US might not get much of the action.
Sure, with strings attached... (Score:3)
For example, currently there's a problem with proprietary, ever-changing battery packs with early electric cars starting to have the problem of no readily available replacement stock or remanufacturing service. Would be nice to have some sort of public good to extend service life of BEVs by at least a battery replacement, even at some reasonable customer cost...
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I wasn't saying that the government would fund replacement batteries, but they may attach stipulations to loans to guide the manufacturers toward more workable battery designs.
As it stands, the automotive companies are churning new incompatible generations of packs and cells, this means that an older car is unable to get a refresh of its battery pack right when that battery pack would need replacement. The economies of scale required to make remanufacturing/recycling of the batteries is being hamstrung by
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currently there's a problem with proprietary, ever-changing battery packs with early electric cars starting to have the problem of no readily available replacement stock or remanufacturing service. Would be nice to have some sort of public good to extend service life of BEVs by at least a battery replacement, even at some reasonable customer cost...
The one and only thing I want in this department is a law against EV battery DRM, so that I can replace the pack with a superior future pack (or more likely, since they are frequently structural, replace its guts) instead of having to rebuild my old pack with compatible cells. There is no practical need to have manufacturers be required to be involved in battery replacement, because anyone who can add and multiply (and maybe occasionally subtract and divide!) should be able to figure out how to string toget
Need to solve the raw material problem. (Score:1)
If the goal is to get more American made cars then the federal government needs to solve the raw material problem. Electric vehicles need rare earth elements in the motors or they become too large and heavy to be practical. Electric vehicle batteries need elements like lithium, cobalt, and so many more to keep the batteries small and light enough to be practical.
America needs mines. Because of many overly complex rules on mining it is simply cheaper to import these raw materials than to mine them domesti
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Luckily there's the Rhyolite Ridge mine project planned in Nevada for both Lithium and Boron with production capacity estimated at 20,000t of Lithium carbonate and 170,000 t of Boric acid annually which will make it one of the biggest mines for the stuff in the world. Boron in particular keeps popping up as something useful in next gen battery tech as well as for hydrogen storage, so it's great there's a ready supply of the stuff.
https://www.mining-technology.... [mining-technology.com]
This is something that the US as well as Euro
Mary Barra (Score:1)
Mary Barra only made $29M last year. Obviously, that is not enough. She'll certainly be making more with this bit of corporate welfare.
GM should have failed.
fucking charity (Score:2)
Is GM a fucking charity or a fucking business ??????????
Re:fucking charity (Score:4, Insightful)
GM is a defense contractor.
Maintaining GM is a national defense issue.
The same was historically true of Chrysler, which produced the M1 Abrams tank. But production of those ended at ~5,100 total and we won't build any more because MBTs are all but obsolete (as is now being proven in Ukraine.) GM is working on the next generation of desert fighters (and has been [greencarreports.com]), HFCVs running on fuel cells developed in a joint partnership with Honda [fcsmllc.com]. Park a nuclear carrier off the coast and use it to make hydrogen fuel.
Preserving those auto jobs is fairly important economically, but preserving GM is part of the military-for-profit strategy.
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I don' t buy that. The defense part of it could be spun off. This is political.
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The defense part of it could be spun off.
That means more pork, not less.
loans (Score:1)
Kill kill kill (Score:2)
Biden admin hoping GM can kill that racist, homophobe, transphobe, and oh, yeah no longer Democrat Elon Musk.