Mary Barra, G.M.’s chief executive, said that the company had fixed battery-manufacturing problems and that its electric vehicles would soon be profitable.
The agreement, if ratified, will cover 1,600 workers making batteries for General Motors in Ohio. The union said it would be a model for efforts elsewhere.
The automaker has placed a bet on battery-powered cars, but it has struggled to produce and sell the vehicles in large numbers.
Investment plans for U.S. battery production have increased since President Biden signed a law that offers generous incentives for electric cars and green energy.
Competition, government incentives and falling raw material prices are making battery-powered cars more affordable sooner than expected.
The result, at a plant owned by General Motors and a South Korean company, is a milestone for the auto union in organizing electric vehicle workers.
Investments in battery factories, solar panel manufacturing and mining will help the Biden administration meet targets for reducing greenhouse gases.
The announcement comes as the auto industry ramps up its efforts to switch to electric vehicles.
The loan will help the automaker and its supplier build electric vehicle battery factories in Ohio, Tennessee and Michigan.
The automaker said it had reached deals to acquire more battery packs in its push to produce 600,000 electric vehicles a year by the end of 2023.