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Biden Administration Offers $12 Billion to Boost Advanced Vehicle Production

The Biden administration is dedicating $12 billion in grants and loans to help automakers and suppliers retrofit plants for the production of electric and other advanced vehicles.

Joe Biden
Joe Biden

A Transition with No One Left Behind

Energy Secretary Jennifer Granholm announced the availability of funds, stating the administration's commitment to ensure that "there is no worker, no community left behind" during the transition to electric vehicles (EVs). This move is aimed at mitigating criticism from automakers and the United Auto Workers (UAW) union over proposed environmental regulations intended to accelerate the adoption of EVs.

Addressing Concerns of Job Losses

The UAW has expressed concerns that a rapid transition to EVs could jeopardize thousands of jobs in states like Michigan, Ohio, Illinois, and Indiana. Amidst these concerns, UAW members recently voted in favor of authorizing a strike at the Detroit Three automakers if an agreement on wages and pension plans is not reached before the current contract expires.

Possibility of Saving Factories with Government Aid

UAW President Shawn Fain has been advocating for the Belvidere, Illinois Jeep factory, which Stellantis (NYSE: STLA) is planning to close. Stellantis has indicated that government aid might enable the factory to produce a new product, thereby preventing closure. Granholm noted that plants built around communities are well-positioned to benefit from the funding opportunities.

Funding Criteria and Sources

While there are no specific labor requirements to receive the funding, projects with better labor conditions will be prioritized, according to an Energy Department official. Of the $12 billion, $2 billion will come from the Inflation Reduction Act passed by Democrats last year, and $10 billion will be provided by the Energy Department's Loans Program Office.