US lithium-ion battery separator materials company Entek has received a conditional commitment of up to $1.2 billion from the US Department of Energy’s Loan Programs Office (LPO).

The loan will finance a new facility in Terre Haute, Indiana, to manufacture lithium-ion battery separators for EV production. Based on current form factors chosen by cell manufacturers, the project will support around 1.9 million mid-size EVs or 1.3m electric SUVs.

Entek will also sell the separators to manufacturers of lithium-ion batteries for energy storage applications. The company already has a supply contract with battery cell developer Kore Power, Kallanish understands.

The Terre Haute plant is expected to strengthen the lithium-ion battery cells supply chain, which the DOE says is in line with the Biden-Harris Administration’s clean energy plans.

It will also help manufacturers in building IRA-compliant EVs, enabling end consumers to access the 30D Clean Vehicle Credit.

According to DOE data, the North American lithium-ion EV battery industry will require annual separator production of 7-10 billion square metres by 2030.

Entek’s facility will be built with a capacity to manufacture 1.72 billion square metres of separator material annually, all of which will be directed to the North American market. 

The group, which has operations in the US, the UK, India, China, Singapore, Indonesia and Japan, has committed to recruiting local workers who have been displaced from manufacturing industries. It foresees 763 construction jobs and 635 operational jobs.

The loan depends on the satisfaction of “certain technical, legal, environmental, and financial conditions” on both sides, the DOE says.