Cleantech & EV'sNews

Biden gives lifeline to legacy automakers with $15B to retrofit existing factories for EV production

The Biden-Harris Administration announced $15 billion in funding to retool existing factories so that these factories can produce electric vehicles and batteries.

This is a lifeline for legacy automakers struggling to be profitable in the EV transition.

The Department of Energy announced in a press release today:

As part of President Biden’s Investing in America agenda, the U.S. Department of Energy (DOE) announced a $15.5 billion package of funding and loans primarily focused on retooling existing factories for the transition to electric vehicles (EVs)—supporting good jobs and a just transition to EVs.

The money is split between grants and loans for retooling existing factories for EV production and battery production:

  • This includes making available $2 billion in grants and up to $10 billion in loans to support automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host these manufacturing facilities.
  • The Department also announced a Notice of Intent to make available $3.5 billion in funding to expand domestic manufacturing of batteries for electric vehicles and the nation’s grid,

By targeting the retooling of existing factories, the administration is helping legacy automakers that are currently struggling to sell EVs profitably as they transition their manufacturing assets for electrification.

It could technically also help EV startups that have taken over facilities that used to produce internal combustion engine vehicles. For example, Rivian is producing its R1T and R1S electric trucks in a former Mitsubishi plant in Illinois.

Top comment by Cypress


Liked by 2 people

the Biden administration is trying to favor legacy automakers as it specifically mentions projects employing union workers as being favored in the grant program:

There are a quite a few legacy automakers with factories in so-called right-to-work states that are not unionized.

Also, the quote you have clearly states an “or” has high-quality high-paying jobs.

That’s all goodness, as far as I’m concerned.

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However, it does seem like the Biden administration is trying to favor legacy automakers as it specifically mentions projects employing union workers as being favored in the grant program:

In the Domestic Conversion Grant Program, higher scores will be given to projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry.

You might remember that the Biden administration also tried to favor automakers employing union workers with the reform to the federal tax credit for electric vehicles but had to abandon the effort after a backlash.

Legacy automakers, like GM and Ford, employ union workers in the US.

Tesla has famously managed to avoid unionization efforts at its US plants, including at its Fremont, California, factory, which used to be operated by GM and Toyota.


Author: Fred Lambert
Source: Electrek

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