EV supplier CelLink in line for $362M federal loan

As it prepares to open its Williamson County factory, CelLink Corp. has conditionally secured a $362 million loan from the federal government to help pay for what was initially planned as a $130 million facility in Georgetown.

The Silicon Valley-based company received preliminary approval for the large amount of debt financing from the Department of Energy’s Loan Programs Office, according to a May 12 announcement. It will help pay for the 295,000-square-foot manufacturing hub at Gateway35 Commerce Center in Georgetown.

The money is from the DoE’s Advanced Technology Vehicles Manufacturing Loan Program, which provides loans to support domestic manufacturing of “advanced technology vehicles, qualifying components, and materials that improve fuel economy.” CelLink is required to hit certain milestones and conditions before it is issued a final loan.

“We’re very excited about the DOE loan,” CelLink CEO Kevin Coakley said in statement. “It will help us finance the construction of the Georgetown factory and free up our cash to do other things like develop new products and expand our customer base. The loan is being structured in a way that gives us very high confidence that we will be able to repay the federal government in full.”

It’s a windfall for CelLink as executives say it’s gearing up to start production at the Georgetown factory, north of Austin. It could start manufacturing in July for its flexible wire harnessing — electrical circuits used in electric vehicles and other end products. The opening has been delayed slightly by global supply chain issues and the lasting effects of the coronavirus pandemic.

Austin Business Journal first reported in December 2021 that CelLink was considering Georgetown for a factory. CelLink confirmed those plans in February 2022 and secured roughly $8 million worth of incentives including infrastructure and job creation grants and property tax abatements. It is taking an entire building in Gateway35, one of two large industrial parks being developed in Georgetown by Titan Development Ltd.

CelLink could become Georgetown’s largest private-sector employer if it reaches its goal of hiring 2,000 people. The company is reportedly a supplier of Tesla Inc. (Nasdaq: TSLA), although CelLink executives have never confirmed that relationship. Tesla nondisclosure agreements are abundant. But CelLink executives have previously said they chose Georgetown to be closer to customers; Tesla operates its new gigafactory in eastern Travis County, about 30 miles away.

In the May 12 announcement, DoE officials noted that CelLink will able to produce flex harnesses for approximately 2.7 million electric vehicles per year, displacing an estimated 7.7 million gallons of gasoline annually.

CelLink notes its cost-efficient wire harnessing has already been installed in more than 1 million vehicles, which have been produced at its plant in San Carlos, California.

Its new Texas facility will have as many as 25 manufacturing lines brought online over the next several years.

The DoE said the loan was part of President Joe Biden‘s Investing in America agenda to “onshore and re-shore domestic manufacturing of technologies that are critical to reaching the clean energy and transportation future.” The Loan Programs Office aims to leverage additional loan authority through the Inflation Reduction Act, which is intended to spur billions of dollars in public-private investments “that will boost the nation’s competitiveness, strengthen supply chains, and create good-paying jobs to power the clean energy economy,” according to the announcement.

Georgetown, with a population of more than 75,000, has been identified by the DoE as a disadvantaged community, meaning it has an above-average impact from “burden indicators” that can be related to fossil fuel dependance, environmental and climate hazards and more. The Biden administration wants at least 40% of clean energy benefits to go to such communities.

CelLink plans to work with the military, manufacturing groups and technical schools to fill out its staff.

Other examples of high-tech manufacturing investments in the Austin area include the growing Tesla plant and Samsung Electronics Co. Ltd.’s next-generation chipmaking facility rising in Taylor, about 20 miles southeast of the CelLink plant. Economic development experts have said those two large plants will attract many kinds of suppliers to the region. Williamson County Judge Bill Gravell previously predicted that those projects and the ecosystems that spring up around them “will easily see a quarter of a trillion dollars of capital investment in Central Texas.”

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