Battery maker wins $850M DOE loan to build first US factory

Kore Power will use the conditional loan to try to open a gigafactory in Arizona by 2025. The move comes as battery manufacturing surges in the U.S.
By Jeff St. John

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An artist rendering of a large white industrial facility with the word KOREPLEX
An artist's rendering of Kore Power’s KOREplex lithium-ion battery cell factory being built in Arizona. The U.S.-based company won a conditional $850 million loan commitment from the Department of Energy’s Loan Programs Office. (Kore Power)

Money is flooding into U.S. battery factories, but most of it is going to joint ventures between global automakers and Asian battery-manufacturing giants.

But on Friday, the Biden administration announced a major financial commitment to a U.S.-based battery manufacturer that’s building battery cells to serve a variety of end markets, ranging from EVs to EV-charging support and grid storage.

Kore Power, a Coeur d’Alene, Idaho-based company that currently makes lithium-ion battery cells in China, has won a conditional commitment from the Department of Energy’s Loan Programs Office for an $850 million loan to help build its first major U.S. manufacturing facility in Arizona.

The KOREplex gigafactory is now under construction and set to start producing up to 6 gigawatt-hours per year of nickel manganese cobalt (NMC) and lithium-ion iron phosphate (LFP) battery cells when it begins operating in late 2024 or early 2025. That’s about the same scale of production capacity that Kore now has access to in China via Do-Fluoride Chemicals, its manufacturing partner and owner of the core battery technology Kore will license for use in North America.

Kore plans to double or triple the initial 6 GWh annual manufacturing capacity at its Buckeye, Arizona factory over the coming years — a significant quantity of production, if not quite at the scale the major automaker joint ventures now underway are aiming for. Our goal from the beginning is to bring U.S. product to the U.S. market with U.S. content,” Jay Bellows, Kore Power president, said in a Friday interview.

The factory is part of a bigger push for U.S.-made cleantech products. Since the Inflation Reduction Act passed last August, private firms have invested more than $70 billion in clean energy manufacturing projects, and much of that has gone to fund battery production. Batteries are key to decarbonizing the two biggest-emitting sectors in transportation and electricity, making it crucial for the country to secure its supply of the tech.

Bellows declined to say how much the new factory in Arizona is expected to cost in total. The 1.3-million-square-foot facility is expected to create 700 construction jobs as it’s built out and about 1,250 operations jobs when it opens.

The company currently has projects serving wholesale energy markets and industrial microgrids. It also provides its own software and management services for stationary storage customers, which are underpinned in part by its acquisition last year of the energy-storage-system integrator and developer Northern Reliability Inc. (Bellows was formerly CEO and president of NRI; he took on the president role at Kore after the acquisition.)

Kore, which raised the first $75 million of a planned $150 million investment round last year, is also seeking to ink battery supply agreements with a number of as-yet-unnamed EV manufacturers, which could be announced in the next few months,” Bellows said.

The $850 million loan, which requires Kore to meet certain milestones and conditions before it is made final, comes from the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) loan program. The same program loaned about $8 billion to Ford, Nissan, Tesla and a few other automakers between 2007 and 2010, and has been revived under the Biden administration’s new Loan Programs Office head, Jigar Shah.

Last year the ATVM program awarded a $2.5 billion loan to Ultium Cells, the battery joint venture of General Motors and LG Energy Solution, and a $102 million loan to Syrah Technologies to produce graphite anode material for batteries.

So far this year, the program has offered a number of conditional loan commitments, including $375 million for battery recycler Li-Cycle, $2 billion for battery recycler Redwood Materials, $700 million to the Rhyolite Ridge lithium and boron mining project in Nevada, and $362 million to CelLink, a maker of flexible circuit wiring harnesses and battery-pack interconnection circuits.

These projects represent a cross-section of a complex lithium-ion battery supply chain that will need to expand rapidly to meet growing demand.

The Inflation Reduction Act offers significant tax credits and other incentives to boost domestic production across this battery supply chain and to use minerals and components from North America or free-trade-partner companies. The aim is to decrease reliance on products from China, by far the world’s biggest supplier across key parts of the battery materials sector.

While a handful of U.S.-based companies are currently competing in the mass-market EV space, most of the country’s more than $50 billion in post-IRA battery manufacturing investment is driven by Asian lithium-ion battery giants such as South Korea’s LG Energy Solution, Samsung SDI and SK Innovation, Japan’s Panasonic and China’s CATL and Gotion. On the homegrown side, Michigan-based battery-cell manufacturer Our Next Energy plans to invest $1.6 billion in a battery-manufacturing campus in its home state.

But Shah, head of DOE’s Loan Programs Office, noted that the Inflation Reduction Act and the 2021 bipartisan infrastructure law have given ATVM a wider remit” to support not just light-duty EV batteries but also heavy-duty vehicles, locomotives, marine vessels and aircraft. That’s something Kore can help provide, he said.

Those sectors really need low-volume battery packs,” Shah said in a Friday interview, and there aren’t that many places to go” to buy a few hundred batteries for specialized vehicles, rather than the hundreds of thousands or millions of battery packs being built for mass-market EVs. Kore produces these custom battery packs, as well as custom energy storage for the grid.”

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.