04:23 PM EST, 12/02/2024 (MT Newswires) -- (Adds more detail, comment from Stellantis ( STLA ), StarPlus Energy and the US Department of Energy beginning in fourth paragraph.)

Stellantis' ( STLA ) FCA US subsidiary and Samsung SDI, in a joint venture called StarPlus Energy, have received conditional approval for a $7.54 billion loan package through the US Department of Energy to help fund construction of two lithium-ion battery cell and module manufacturing plants in Kokomo, Indiana, proposed by the companies, the Loan Programs Office of the federal agency said Monday.

The loan is conditioned on the partnership satisfying certain technical, legal, environmental, and financial conditions. If finalized, the loan for the companies' StarPlus Energy joint venture would consist of $6.85 billion in principal and $688 million in capitalized interest, the department's loan office said.

At full capacity, the project is expected to produce about 67 gigawatt hours of battery capacity, which would be enough to supply around 670,000 vehicles each year while replacing about 260.3 million gallons of petroleum annually, the loan office said.

StarPlus Energy told MT Newswires, it was one step closer to its "goal of becoming the world's leading provider of energy solutions for e-mobility" with this loan.

A Stellantis ( STLA ) spokeswoman said the new factory in Indiana expects to begin battery production later this month, with the second phase of the project is scheduled to launch in 2028.

Overall, the Energy Department's Loans Programs Office has announced 32 deals with nearly $54.6 billion in combined value since President Joe Biden took office in 2017. Other recipients include electric pickup truck manufacturer Rivian (RIVN), ethanol producer Gevo (GEVO), insulation products distributor Aspen Aerogels (ASPN) and EVgo (EVGO), which is building a nation-wide network of recharging stations for electric vehicles.

An Energy Department spokesperson told MT Newswires the agency expects incoming Trump Administration to continue supporting previously approved projects.

"There is steel in the ground and job openings at new or expanded facilities around the country," the spokesman said. "It would be irresponsible for any government to turn its back on private sector partners, states and communities that are benefiting from lower energy costs and new economic opportunities spurred" by the Loans Programs Office.