Biden Launches $12 Billion Finance Package for Automakers to Convert Factories to Produce EVs

The Biden administration on Thursday announced a financing package of more than $15 billion aimed at supporting the transition to electric vehicles, including $10 billion in loans and $2 billion in grants to help automotive manufacturers convert factories to produce EVs.

Key criteria for applicants to the new program include the retention of jobs, wages and benefits at the manufacturing facilities, and projects supporting the administration’s initiatives to direct investments to disadvantaged communities.

In a White House statement announcing the new funding programs, Biden said:
“As I’ve said before, under Bidenomics building a clean energy economy can and should provide a win‑win opportunity for auto companies and unionized workers who have anchored the American economy for decades. This funding from my Investing in America agenda will further that goal by creating auto manufacturing jobs here at home and helping companies avoid painful plant closings — and to retool, reboot, and rehire in the same factories and communities with high wages.”

The new financing programs, launched by the U.S. Department of Energy (DOE), mark the latest in a series of initiatives by the administration aimed at accelerating the shift to clean mobility. President Biden signed an executive order signed in 2021 mandating that zero emissions vehicles make up half of new vehicle sales in the U.S. by 2030, and the administration’s Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) allocates billions in investments, grants and tax credits supporting EV and battery manufacturing and the buildout of electric vehicle charging infrastructure.

The new DOE loan program will provide up to $10 billion for automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host manufacturing facilities, under the DOE’s Loan Programs Office’s (LPO) Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. In addition to ATVM criteria, considerations for projects funded will include the retention of existing workers, providing high wages and benefits, workplace rights, and commitments to keep facilities open until new facilities are complete. For projects that convert an existing factory, evaluation factors will include contribution to the local economy, employment history, anticipated employment, and facility duration. Applicants that currently pay top quartile wages in their industry and non-wage compensation benefits will be prioritized.

The $2 billion grant program, funded by the BIL, will support the expansion of light-, medium-, and heavy-duty electrified vehicles and components manufacturing, through 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 will give preference to projects committed to high wages for production workers and maintaining collective bargaining agreements, with selected projects also contributing to the administration’s Justice40 initiative, which targets directing 40% of clean energy investment benefits to disadvantaged communities, and those experiencing the worst impacts of climate change.

In addition to the loan and grant programs, the administration also announced that it intends to invest $3.5 billion to increase production of advanced batteries and battery materials for electric vehicles and grid storage.

To find out more details please visit : https://www.esgtoday.com/