As part of President Biden’s “Investing in America” agenda, the U.S. Department of Energy (DOE) has unveiled a substantial $15.5 billion funding and loan package. This initiative is primarily directed towards the retooling of existing factories to facilitate the transition to electric vehicles (EVs), with a core focus on supporting quality job creation and a shift to EV technology. Within this package, $2 billion in grants and up to $10 billion in loans will be allocated to back automotive manufacturing conversion projects. These projects are specifically aimed at preserving high-quality employment opportunities in communities that currently house these manufacturing facilities. Notably, the Domestic Conversion Grant Program will give higher ratings to projects that are likely to retain collective bargaining agreements and those maintaining a high-quality, high-wage hourly production workforce, including applicants offering top-quartile industry wages.
Furthermore, the DOE has announced a Notice of Intent to provide $3.5 billion in funding. This funding will contribute to expanding domestic battery manufacturing for electric vehicles and the national power grid, as well as battery materials and components that are currently imported. The Notice of Intent outlines the DOE’s commitment to nurturing domestic industry growth, supporting manufacturing workers, and championing equity and environmental justice.
Collectively, these federal investments underscore President Biden’s unwavering dedication to preserving and expanding high-paying manufacturing positions while empowering workers to play a significant role and enjoy the economic advantages of the transition to clean energy. The “Investing in America” agenda also plays a crucial role in enhancing national security by fortifying domestic supply chains essential to achieving the Administration’s ambitious climate objectives.
U.S. Secretary of Energy Jennifer M. Granholm emphasized the Administration’s dedication stating, “President Biden is investing in the workforce and factories that made our country a global manufacturing powerhouse. Today’s announcements show that President Biden understands that building the cars of the future also necessitates helping the communities challenged by the transition away from the internal combustion engine.”
Manufacturers with varying capital needs can apply for assistance, either through financial grants offered by the DOE’s Office of Manufacturing and Energy Supply Chains (MESC) or preferential debt financing through the DOE’s Loan Program Office.
Conversion and Retrofitting of Manufacturing Facilities
The DOE has introduced a $2 billion funding opportunity designed to accelerate the conversion of long-established facilities into hubs for manufacturing electric vehicles and components. Supported by the Inflation Reduction Act, the Domestic Manufacturing Conversion Grants for Electrified Vehicles program will provide cost-shared grants for domestic production of efficient hybrid, plug-in electric hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles. This program is expected to expand the production of light-, medium-, and heavy-duty electrified vehicles and components while supporting commercial facilities involved in vehicle assembly and component manufacturing. The program places a strong emphasis on facilitating a just transition for workers and communities impacted by the shift to electrified transportation, with particular attention to historically automotive manufacturing communities. Projects selected for funding will also contribute to the President’s Justice40 Initiative, which seeks to advance diversity, equity, inclusion, and accessibility in the American workforce.
Leveraging Loan Authority for Automotive Manufacturing Conversion Projects
The DOE is making up to $10 billion in loan authority accessible for applications under the Advanced Technology Vehicles Manufacturing Loan Program. These funds will support automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host manufacturing facilities. Criteria for project selection will include the retention of high wages and benefits, workplace rights, or commitments to keep existing facilities open until new facilities are complete. The DOE will assess the projected economic impacts of facility conversions relative to existing facilities, including contributions to the local economy, employment history, anticipated employment, and the duration of facility existence.
Strengthening American Battery Manufacturing and Domestic Supply Chains
The DOE’s intent to invest approximately $3.5 billion will boost the production of advanced batteries and critical battery materials, vital to the growing clean energy industries of the future, such as electric vehicles and energy storage. This funding will support the creation of new, retrofitted, and expanded domestic commercial facilities for battery materials, battery components, and cell manufacturing. The program is committed to supporting communities with experienced auto workers, strong workforce practices, and plans to create high-quality jobs.
These announcements reflect the Biden-Harris Administration’s “Investing in America” agenda, which aims to revitalize the American economy, rebuild infrastructure, attract private sector investments, create well-paying jobs, and advance a clean-energy economy to combat climate change and enhance community resilience. Both the conversion grant funding opportunity and battery manufacturing notice of intent will be administered by MESC.