T he Department of Energy said Monday it intends to loan an Ohio-based battery cell manufacturer $2.5 billion to help stand up three factories in service of the Biden administration's goal of electrifying the nation's vehicle fleet.

DOE announced the conditional commitment with Ultium Cells, a joint venture between General Motors and LG Energy Solution. If finalized, the loan would help finance the construction of a plant in Ohio, Tennessee, and Michigan.

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"By manufacturing [lithium-ion] battery cells for EV battery packs in the United States, Ultium Cells will supply GM as it works to deliver its plan to eliminate 100% of tailpipe emissions from its new light-duty vehicles by 2035," the department said.

The loan would be financed by the Advanced Technology Vehicles Manufacturing program, part of DOE's broader Loan Programs Office, and is the first loan exclusively for a battery cell manufacturing project under ATVM, according to DOE.

Increasing the share of electric vehicles on the road is one of the Biden administration's priorities and is integral to its strategy to reduce greenhouse gas emissions across the economy. Transportation was the nation's leading source of greenhouse gas emissions in 2020, according to the Environmental Protection Agency, contributing 27% of total emissions.

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President Joe Biden set a goal of 50% of all new passenger vehicle sales being electric by 2030.

However, much of the world's battery manufacturing capacity is concentrated elsewhere, especially in China. Lawmakers in both parties have agreed that the U.S. must reshore production and make more batteries domestically to serve economic, environmental, and national security goals.