US President Biden allocates $1.7 B for EV car manufacturing

The US Department of Energy announced $1.7 billion in grant awards today to help automakers keep eleven troubled manufacturing plants open and start building EVs there.

The 11 selected plants are located in eight different states and have been designated as “shuttered or at-risk” facilities. These plants were either recently shut down by car manufacturers or could have potentially seen job losses soon as automakers’ plans changed.

The grants are part of the ‘Domestic Conversion Grant Program,’ which directs government support to help plants convert to electric vehicle manufacturing.

The money for these grants came from the Inflation Reduction Act, passed in 2022. This bill, with nearly $400 billion in funding for climate-related expenditures, is the largest climate spending bill ever passed by any country.

Supporting American EV manufacturing

However, the IRA isn’t just about climate spending; it is also intended to support American EV manufacturing, hoping to supply onshore or friend-shore assembly and materials/parts for electric vehicles.

It included several domestic manufacturing provisions for EVs and subsidies for manufacturers who build them in the US. These provisions have resulted in hundreds of billions in investment and many thousands of jobs in EV manufacturing-related businesses.

The eleven facilities selected today include plants and suppliers for Hyundai, Blue Bird, Cummins, Fiat-Chrysler, GM, Harley, Volvo, and ZF. These plants are in eight states – Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia.

“Today’s announcement from the Department of Energy is a big win for the American people and demonstrates President Biden’s bold vision for how we are choosing to take on the climate crisis: with America’s workers leading the way,” said Assistant to the President and National Climate Advisor Ali Zaidi.

“This ground-breaking program is central to catalyzing expansion of the industrial capacity to help us meet the President’s climate goals and allow tens of thousands of skilled American workers to participate in the great comeback story of American manufacturing,” he added.

Goals to meet

While these plants were selected for awards, the money is still contingent on negotiations to ensure that the companies meet specific goals before grant money is officially transferred.

According to the White House, these grants would “create and retain tens of thousands of jobs”. These projects are expected to create 2,900 new jobs, and keeping the facilities open will retain 15,000 union jobs that would have been lost.

As with other job packages, these are likely to have additional knock-on effects in the communities where these plants are sited, helping to support non-manufacturing jobs.

The White House also says that this advances its ‘Justice40 Initiative’, a commitment that 40% of climate spending will be directed toward disadvantaged communities.

Impressive support

Many analysts, inside and outside the US, have been impressed by Biden’s support for EVs, particularly domestic manufacturing.

While the recent imposition of import tariffs may not be a good idea, it has at least been supported by significant investments and policy changes that have borne fruit.

Of course, one can’t ignore that this also happens in an election year. But when American citizens have to choose between a President who has invested in American manufacturing of high-tech vehicles that will be important for the present and future of one of the US’ most important historical industries and a man who wants to dismantle environmental protections, we hope they go for the right choice.