CoachTerry
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The Energy Department said it would favor projects that are likely to retain collective bargaining agreements and have high wages.
Auto Industry’s Shift to EVs Gets $12 Billion Boost
Funding from Washington will help automakers retrofit factories to produce electric vehicles
WASHINGTON, D.C.—The Energy Department said it is planning to provide up to $12 billion in funding for automakers to retrofit existing manufacturing facilities in the U.S. for the production of electric and hybrid vehicles.
Most of the funding, some $10 billion, will be allocated from an advanced-vehicle manufacturing program overseen by the department’s Loan Programs Office, Energy Secretary Jennifer Granholm said. The other $2 billion will come from funds allocated by last year’s Inflation Reduction Act.
The funds will help provide jobs in longstanding automaking communities as the auto industry transitions to electric vehicles, Granholm said. The Energy Department said it would favor projects that are likely to retain collective bargaining agreements and have high wages.
The department also plans to make $3.5 billion available for domestic battery manufacturing. Companies and the U.S. government have been shelling out billions of dollars to establish a North American supply chain for rechargeable battery materials as it races to catch up with China, which dominates the battery supply chain.
The funds come on top of previous Energy Department loan commitments to help bolster U.S. EV and battery production. A Ford Motor joint venture received a record $9.2 billion loan commitment from the department to finance battery plants in Tennessee and Kentucky critical to the automaker’s push into EVs.
The LPO last year reached a deal with a joint venture between General Motors and LG Energy Solution on a $2.5 billion loan for battery production.
The auto industry is plowing billions of dollars into converting their factories from building fossil-fuel vehicles to those that run on battery power. The investments have spurred a building boom of new car factories in the U.S., mostly in the South, and has led car companies to pare back in other areas, such as laying off salaried workers and streamlining operations not essential to the EV future.
The shift to EVs is expected to be costly, but automakers have been making robust profits, benefiting from a shortage of cars that have pushed prices to record highs.
While EV sales have grown, there are signs demand is starting to ease. Tesla and others have cut prices to stimulate buyer interest and inventories have been rising on some models.
The EV transition has also become a focus of labor talks in Detroit.
United Auto Workers President Shawn Fain is worried about the impact on wages and job security. He has withheld the union’s endorsement for President Biden’s re-election bid, saying he wants more assurances that the government’s support for EVs will also preserve unionized-work.
Write to Scott Patterson at [email protected]
Auto Industry’s Shift to EVs Gets $12 Billion Boost
Funding from Washington will help automakers retrofit factories to produce electric vehicles
WASHINGTON, D.C.—The Energy Department said it is planning to provide up to $12 billion in funding for automakers to retrofit existing manufacturing facilities in the U.S. for the production of electric and hybrid vehicles.
Most of the funding, some $10 billion, will be allocated from an advanced-vehicle manufacturing program overseen by the department’s Loan Programs Office, Energy Secretary Jennifer Granholm said. The other $2 billion will come from funds allocated by last year’s Inflation Reduction Act.
The funds will help provide jobs in longstanding automaking communities as the auto industry transitions to electric vehicles, Granholm said. The Energy Department said it would favor projects that are likely to retain collective bargaining agreements and have high wages.
The department also plans to make $3.5 billion available for domestic battery manufacturing. Companies and the U.S. government have been shelling out billions of dollars to establish a North American supply chain for rechargeable battery materials as it races to catch up with China, which dominates the battery supply chain.
The funds come on top of previous Energy Department loan commitments to help bolster U.S. EV and battery production. A Ford Motor joint venture received a record $9.2 billion loan commitment from the department to finance battery plants in Tennessee and Kentucky critical to the automaker’s push into EVs.
The LPO last year reached a deal with a joint venture between General Motors and LG Energy Solution on a $2.5 billion loan for battery production.
The auto industry is plowing billions of dollars into converting their factories from building fossil-fuel vehicles to those that run on battery power. The investments have spurred a building boom of new car factories in the U.S., mostly in the South, and has led car companies to pare back in other areas, such as laying off salaried workers and streamlining operations not essential to the EV future.
The shift to EVs is expected to be costly, but automakers have been making robust profits, benefiting from a shortage of cars that have pushed prices to record highs.
While EV sales have grown, there are signs demand is starting to ease. Tesla and others have cut prices to stimulate buyer interest and inventories have been rising on some models.
The EV transition has also become a focus of labor talks in Detroit.
United Auto Workers President Shawn Fain is worried about the impact on wages and job security. He has withheld the union’s endorsement for President Biden’s re-election bid, saying he wants more assurances that the government’s support for EVs will also preserve unionized-work.
Write to Scott Patterson at [email protected]
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