The United States Department of Energy (DOE)’s Loan Programs Office (LPO) has given preliminary approval for a loan of $544 million to SK Siltron CSS for the expansion of manufacturing silicon carbide (SiC) wafers for use in electric vehicles (EVs), a press release from LPO said.
It is anticipated that the conditional commitment to expand production of the essential EV components will create as many as 200 jobs in Bay City, Michigan, during the first phase and up to 200 operations jobs once full production is underway.
SK Siltron CSS’ facility is expected to be one of the top five SiC wafer manufacturers in the world.
A separate LPO loan of $165.9 million to American Battery Solutions would be for the production of battery packs for EVs in Michigan and Ohio.
Nearly 700 jobs could be created by the two EV manufacturing projects, DOE said, as reported by E&E News.
“Michigan has been blessed with all sorts of locations that already have this infrastructure in place, plus trained workers,” said Jigar Shah, LPO office director, at an event in Detroit on Thursday, as E&E News reported. “It’s really at the cutting edge.”
SK Siltron CSS is an offshoot of the South Korean SK Group, while American Battery Solutions is owned by Japanese manufacturer Komatsu, which produces industrial equipment and other products.
Jianwei Dong, CEO of SK Siltron CSS, said the company’s first formal loan application was submitted in March of 2022.
“This project is an important step towards ensuring a resilient and robust supply chain in the United States,” Dong said, as reported by E&E News.
SK Siltron CSS said SiC wafers are “more efficient” than silicon at conducting heat and handling high power, which leads to faster EV charging and as much as 10 percent longer range. Not enough charging stations and slow charging times have been barriers to more EV sales in the U.S.
“The high-quality SiC wafers required to maximize these performance improvements are currently under-supplied, and demand is expected to rise with EV sales,” said SK Siltron CSS, as E&E News reported.
According to the DOE, the loan to American Battery Solutions will fund enough EVs to offset 78,264 tons of annual carbon emissions from gas-powered vehicles.
A report by climate investment tracker Clean Investment Monitor — led by the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology and the Rhodium Group — said U.S. EV sales are in alignment with climate goals.
“It is likely, based on Q4 growth rates, dealer inventory levels, and forward guidance from Tesla last month, that annual ZEV sales growth will fall in 2024 from the more than 50% growth experienced in 2023,” the report said. “But sustained 50% year-over-year sales growth was neither expected to occur as a result of the [Inflation Reduction Act], nor is it required to achieve the legislation’s goal of a 40% reduction in net GHG [greenhouse gas] emissions by 2030.”
The projects support the Biden-Harris administration’s target that 50 percent of all new vehicle sales in the U.S. be zero emissions by 2030, according to the press release.
“Today’s announcement also supports the President’s comprehensive strategy to build a safer, more sustainable transportation system and slash all greenhouse emissions from the transportation sector by 2050. The project will also help build a more resilient semiconductor supply chain and grow a diverse domestic semiconductor workforce to give American industry and workers across the nation a competitive edge on the world stage,” the press release said.
Before DOE can solidify and fund the loan, SK Siltron CSS will need to satisfy specific legal, environmental, technical and financial conditions.
The company will collaborate with the Michigan New Jobs Training Program and Delta College to train local workers in SiC wafer manufacturing.
“The project site is located near disadvantaged communities and is expected to benefit local communities and local workers, aligning with the Biden-Harris Administration’s Justice40 Initiative, which set a goal that 40 percent of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution,” the press release said.
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