Energy Dept. Announces $12 Billion to Help Factories Convert to Electric Cars

Source: By Coral Davenport, New York Times • Posted: Thursday, August 31, 2023

The grants and loans, provided under the 2022 Inflation Reduction Act, are meant to keep autoworkers’ jobs in their communities.

An automobile assembly line. The unfinished body of a blue car is suspended about six feet from the shop floor over a boxy, yellow and black battery. Two workers are focused on the battery.
Workers installing a battery in a Chevrolet Bolt in Lake Orion, Mich.Carlos Osorio/Associated Press

The Energy Department announced on Thursday that it had made $2 billion in grants and $10 billion in loans available to auto companies to convert existing factories that build gas-powered cars and trucks into plants that produce hybrid and electric vehicles.

The money, provided under the 2022 Inflation Reduction Act, is aimed at maintaining jobs in communities that have been defined by the auto industry.

It comes as President Biden is seeking the endorsement of the United Auto Workers union, which has expressed concern over recent decisions by carmakers to ramp up electric vehicle manufacturing, which requires fewer workers, and to locate new factories in states without unionized labor. The U.A.W. has so far declined to support Mr. Biden’s re-election campaign.

As part of his climate agenda, Mr. Biden is combining federal investments with an aggressive new regulatory proposal to try to ensure that two-thirds of all new cars sold in the United States are all-electric by 2032, up from about 7 percent today.Transportation is responsible for about one-third of the greenhouse gases generated by the United States, pollution that is dangerously heating the planet.

In July, the auto industry’s largest lobbying group assailed those proposed regulations, saying they would lead to soaring costs for companies and consumers.

The announcement on Thursday appeared intended to assuage the concerns of both the automakers and the labor union. In a statement, Mr. Biden said, “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.”

The funding would “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,” he said.

The administration also announced that, by the end of the year, it would make $3.5 billion in grants available to expand the manufacturing of electric vehicle batteries and battery components. That money was provided by a 2021 infrastructure law.

The Alliance for Automotive Innovation, the lobbying group that is fighting to weaken the proposed electric vehicle regulations, said it was pleased by the release of the funds.

Brian Weiss, a spokesman for the alliance, said in a statement, “These incentives and grants from the Department of Energy will further advance the domestic automotive supply chain and globally competitive battery manufacturing platform that automakers have already made sizable investments.”

Coral Davenport covers energy and environmental policy for the climate desk from Washington. She was part of a Times team that was a finalist for the Pulitzer Prize for distinguished public service journalism in 2020, and part of a Times team that received Columbia University’s John B. Oakes award for distinguished environmental journalism in 2018. More about Coral Davenport