Biden Administration to Invest $2 Billion in Accelerating Electric Vehicle Manufacturing

(CTN News) – The Biden administration plans to dedicate $2 billion from the Inflation Reduction Act to expedite the domestic manufacturing of electric vehicles (EVs) and revive struggling plants.

By offering grants and subsidies, the administration aims to support the conversion of existing auto plants for EV production, alleviating concerns from automakers and the United Auto Workers (UAW) union regarding proposed environmental regulations that facilitate the transition to EVs.

Biden’s Push for Decarbonization and EV Transition

Known as the Domestic Manufacturing Conversion Grants for EVs program, it will provide cost-shared grants for producing an efficient hybrid, plug-in electric hybrid, fully electric, and fuel cell vehicles. The program will prioritize projects that refurbish or retool manufacturing plants that recently ceased operations or were expected to close soon.

The primary goal of this initiative is to preserve existing jobs, including union jobs, wages, and work opportunities in communities that have been vital to the automotive industry for decades, as stated by the Department of Energy’s Vehicle Technologies Office.

Recent bankruptcy protection filing by Lordstown Motors, an Ohio-based electric truck manufacturer, highlights the challenges faced by startups that went public during the pandemic-induced boom in Special Purpose Acquisition Companies (SPACs).

Aligned with its objective of achieving a carbon-neutral economy by 2050, the Biden administration urges the U.S. auto industry to accelerate its transition to EVs. In April, the Environmental Protection Agency (EPA) proposed rules that could shift up to two-thirds of the new vehicle market to EVs by 2032.

However, the Alliance for Automotive Innovation, representing General Motors, Stellantis NV, Toyota Motor, and others, criticized the EPA proposal, labeling it a de facto battery electric vehicle mandate deemed neither reasonable nor achievable.

Funding Details and Timeline for the Grants Program

The UAW has expressed concerns about the rapid transition to EVs, warning that it could jeopardize thousands of jobs in states like Michigan, Ohio, Illinois, and Indiana.

UAW President Shawn Fain has been actively campaigning to save the Belvidere, Illinois, Jeep factory, which Stellantis plans to close. The automaker has indicated the possibility of reopening the factory with government assistance for a new product.

The individual grants awarded through the program may range from $25 million to $500 million, with funding available until September 2031.

The notice of intent issued by the Energy Department is a preliminary step, and a funding announcement may follow, which could be similar to the notice, substantially different, or potentially not issued at all, as stated by the department.