ENTEK bags conditional $1.78 billion loan for US EV battery separator plant

“There has never been a more exciting time to be a manufacturer in the battery industry.”

That is the opinion of Larry Keith, CEO of ENTEK Lithium Separators LLC, which has landed a US$1.2 billion ($1.78 billion) loan to build a plant in the US for the production of lithium-ion battery separators for the electric vehicle market.

Battery separators are a membrane designed to prevent electronic conduction between the anode and cathode of a battery, and play a key role in the safety and performance of lithium-ion batteries.

Announced by the US Department of Energy’s loans office, the funding will substantially finance the new facility in Terre Haute, Indiana, including the creation of 763 construction and 635 operational jobs.

The project is expected to support roughly 1.9 million mid-size electric vehicles or 1.3 million electric sport utility vehicles.

As a conditional commitment, the funding is dependent on ENTEK satisfying certain technical, legal, environmental, and financial metrics. Should it be finalised, the loan will be offered through the Advanced Technology Vehicles Manufacturing Loan Program, which has US$40 billion in direct lending authority.

“ENTEK is a technology company at its core with expertise in equipment design and fabrication, process technologies, and materials science,” ENTEK CTO Richard Pekala says. 

“This combination makes ENTEK the right company to lead the US expansion of separator manufacturing.”

Though the battery metals sector has boomed in recent years, there is speculation that the world may be in the ‘middle innings’ of an electric vehicle recession, according to an analysis by Morgan Stanley.

That is in addition to increasingly strict requirements faced by automakers, as they look to qualify for US$7,500 electric vehicle tax credits. New rules took effect on 1 January, restricting Chinese content in batteries eligible for tax credits of up to US$7,500, which significantly cut the number of eligible vehicles.

Automakers have since made substantial changes to supply chains, managing to claw back eligibility for some vehicles.

While the proposed funding represents a major instalment of support for America’s decarbonisation goals, it is not yet clear when the commitment will be finalised.

In June 2023, the US Department of Energy announced its intention to loan up to US$9.2 billion to Blue Oval SK, a joint venture between Ford Motor (NYSE:F) and SK Innovation (KRX:096770) subsidiary SK On.

The financing was to support the construction of three new battery manufacturing plants in Tennessee and Kentucky, but — more than a year later — the loan has still not closed.

Write to Oliver Gray at Mining.com.au

Images: ENTEK
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Written By Oliver Gray
Originally from Perth, Oliver has a keen interest long-form journalism. He has written for a number of publications and was most recently Contributing Editor of The Market Herald’s opinion section, Art of the Essay.