WASHINGTON (Reuters) - The United States has closed a $362 million loan to CelLink Corp to help finance the construction of a plant in Texas to make components for electric vehicle assembly, the Department of Energy's loan programs office said on Wednesday.

WHY IT'S IMPORTANT

The financing from the government's Advanced Technology Vehicles Manufacturing loan program is for the development of lighter, more efficient flexible circuit wiring harnesses for automotive and other industries. CelLink has developed a new method of connecting battery cells and packs, and transferring power and data across vehicle sensors, modules and electronic control units, according to the company.

Most wire harness production for the U.S. market is currently in low-cost labor countries due to the complex processes associated with traditional wire harness assembly, the Energy Department has said.

BY THE NUMBERS

Once operational, the plant is expected to produce enough wiring harnesses to support the manufacture of about 2.7 million EVs per year and more than 1,200 jobs.

KEY QUOTES

"EV sales have quadrupled since President (Joe) Biden took office, reaching historic levels just last year and projected to hit new records for 2024, underscoring why it's essential for the United States to harness manufacturing of all the key EV components," said U.S. Energy Secretary Jennifer Granholm.

WHAT'S NEXT

The Texas facility will eventually hold up to 25 manufacturing lines that will be brought online in stages over the next several years depending on demand.

The Biden administration last month slashed its target for electric vehicle adoption projecting that between 35% and 56% of all new vehicles will be electric between 2030 and 2032. Auto workers in the political battleground state of Michigan had slammed the administration's tougher targets.