US set to issue $362 million loan for vehicle wiring production

By David Shepardson

WASHINGTON (Reuters) – The U.S. Energy Department on Friday said it intends to loan California startup CelLink $362 million to help finance construction of a U.S. manufacturing facility to improve key vehicle wiring components.

The conditional commitment from the government’s Advanced Technology Vehicles Manufacturing loan program is for the development of lighter, more efficient flexible circuit wiring harnesses for automotive and other industries. Once fully operational, the Georgetown, Texas facility is expected to produce flex harnesses to support some 2.7 million electric vehicles per year, the department said.

CelLink has developed a new method of connecting battery cells and packs, and transferring power and data across vehicle sensors, modules and electronic control units, according to the company.

CelLink last year closed a $250 million funding round backed by several large auto industry players. Founded in 2011 and based in San Carlos, California, CelLink has been scaling up production of its lightweight flexible circuits since 2019.

The company said last year new funds would be used to build a factory in Georgetown, Texas. CelLink told Reuters last year it expects to find applications for its products in commercial vehicles, agriculture, military and aerospace.

Strategic investors in the 2022 round included BMW iVentures, Lear (NYSE:) Corp, Robert Bosch Venture Capital and 3M, all of which had invested previously. Another early investor was Ford Motor (NYSE:).

Most wire harness production for the U.S. market currently occurs in low-cost labor countries due to the complex processes associated with traditional wire harness assembly, the Energy Department said.

CelLink, which already has products installed in more than a million vehicles on the road, currently operates a manufacturing facility in San Carlos. The new Texas facility will eventually hold up to 25 manufacturing lines that will be brought online in stages over the next several years depending on demand.

The Biden administration has proposed environmental regulations expected to result in at least 60% of new vehicles being electric by 2030.