The Biden administration announced on Thursday that it will provide $15.5 billion to assist manufacturers in retooling existing plants that produce gas-powered vehicles and converting them into factories that produce electric cars and trucks.
The financing from the United States Department of Energy includes $2 billion in Inflation Reduction Act grants for converting American manufacturing facilities and enhancing production of hybrid, battery-powered, as well as hydrogen fuel-cell vehicles.
The DOE also intends to invest up to $10 billion in conversion projects via the Advanced Technology Vehicles Manufacturing Loan Program.
In addition, the Bipartisan Infrastructure Act could make $3.5 billion available to encourage domestic battery manufacturing.
Unveiling Funds by DOE
The announcement comes at a particularly stressful time for the American car industry, fueled in part by employees’ rising fears that electrifying America’s transportation sector will result in job losses and a shift away from conventional manufacturing locations.
The funds were announced by the DOE almost a week after the United Auto Workers, the nation’s largest auto union, unanimously voted in favor of enabling a strike towards one or all of the Big Three automakers: General Motors, Ford Motor Co., along with Stellantis, the parent company of Jeep and Chrysler.
Union members are pushing for pay increases, the reinstatement of cost-of-living adjustments, and the return of pension schemes; if an agreement is not reached by September 14, they may strike.
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Tax Incentives Provided Under Inflation Reduction Act
All three automakers have already referenced the shift to EVs in their choices to lay off thousands of workers, offer buyouts, and idle auto plants across the industrial Midwest.
Generous tax breaks offered by the Inflation Reduction Act are driving most of this expansion, particularly in the Southeast.
The “right-to-work” legislation endorsed by states in that region, which have been used to undercut union power and give automakers more clout over their workers, are also problematic.
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