The U.S. Department of Energy (DOE) is offering a condition $1.2 billion loan to Entek Lithium Separators, to pay for a new manufacturing facility in Indiana to make parts for electric vehicle batteries. 

Entek primarily makes battery separators, which work as membranes between electrodes in batteries to prevent them from shorting out. The company's new facility will be built in Terre Haute, Indiana, and will be able to manufacture enough battery separators to support nearly two million mid-size EVs.

The DOE says that its larger goal with the loan is to "strengthen the U.S. lithium-ion battery cells supply chain," and make it so the U.S. can meet its goal to have EVs make up half of all new vehicle sales by 2030. In order to reach that goal, the DOE estimates that there will need to be 7-10 billion square meters of battery separator materials manufactured in North America each year. Entek's new Terre Haute facility will be able to account for 1.72 billion square meters of that total annually. 

Separators made at the facility will help U.S. EV manufacturers meet battery sourcing requirements needed to qualify for clean energy vehicle tax credits, with the project expected to create nearly 1,400 new jobs combined between construction and regular operations. Moving forward, Entek and the DOE will also still have to meet a handful of legal, financial and environmental benchmarks to finalize the loan.