The Biden Administration has earmarked US$1.7 billion in funding to transform at-risk or mothballed auto manufacturing plants into electric vehicle (EVs) factories.
The program proposes to convert eleven auto factories across eight US states into operations capable of manufacturing EVs and their components.
“Building a clean energy economy can and should be a win-win for union autoworkers and automakers,” President Joe Biden said in a statement.
“This investment will create thousands of good-paying, union manufacturing jobs and retain even more—from Lansing, Michigan to Fort Valley, Georgia – by helping auto companies retool, reboot, and rehire in the same factories and communities.”
Several factories have already been selected for conversion, including the Stellantis factory in Illinois, General Motor’s 25-year-old factory in Michigan, a Harley-Davidson (NYSE:HOG) facility in Pennsylvania and Blue Bird Corporation’s 600,000-square-foot facility in Georgia, slated to manufacture electric buses.
Further US$15.5 billion to support EV transition
The money forms one element of a larger effort to transform existing infrastructure and manufacturing capability to support electrification.
The Department of Energy (DOE) announced a $15.5 billion package of funding and loans under the Biden Administration’s Investing in America agenda, which will make US$2 billion available in grants and up to US$10 billion in loans.
The Domestic Manufacturing Conversion Grants for electrified vehicles program will provide cost-shared grants for domestic production of efficient hybrid, plug-in electric hybrid, plug-in electric drive and hydrogen fuel cell electric vehicles.
The program aims to support a just transition for workers and communities in the transition to electrified transportation, with particular attention to communities supporting facilities with longer histories in automotive manufacturing.
Almost 14 million new EVs were registered globally in 2023, bringing the total number on roads to 40 million according to the International Energy Agency.
There was also a 35% increase in sales in 2023 year-on-year, remaining strong in the first quarter of 2024 with a further 25% increase on the same period last year.
"There is nothing harder to a manufacturing community than to lose jobs to foreign competition and a changing industry," US Secretary of Energy Jennifer M Granholm said.
"Even as our competitors invest heavily in electric vehicles, these grants ensure that our automotive industry stays competitive — and does it in the communities and with the workforce that have supported the auto industry for generations."