The Biden administration on Thursday launched a new initiative to boost domestic automotive production by offering nearly $2 billion in grants. These funds are aimed at converting 11 auto manufacturing and assembly facilities that have been shuttered or are at risk of closing, enabling them to build electric vehicles and related components. This initiative underscores the administration's commitment to helping the American auto industry pivot towards a sustainable future.

DOE Allocates $1.7 Billion for Facility Retooling

The U.S. Department of Energy (DOE) announced it will distribute $1.7 billion to retool and retrofit union-backed facilities in eight states. These states include Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia. The goal is to spur the U.S. auto industry's transition from fossil fuel-dependent vehicles to low- or zero-emission vehicles. This substantial investment is designed to help the American auto industry pivot towards producing cleaner, more efficient vehicles.

Major Automakers and Suppliers to Receive Grants

Prominent automakers like General Motors LLC, Stellantis NV, and Volvo Group, along with auto parts suppliers such as American Autoparts Inc., Cummins Inc., and ZF North America Inc., are among the companies selected for the "domestic auto manufacturing conversion grants." These grants, which were made available through the 2022 Inflation Reduction Act, aim to bolster U.S. production of electric, plug-in hybrid electric vehicles, hydrogen fuel-cell electric vehicles, and other clean cars.

$2B to help the American auto industry pivot : Presidential Endorsement and Economic Impact

"Building a clean energy economy can and should be a win-win for union auto workers and automakers," President Joe Biden stated on Thursday. "This investment will create thousands of good-paying, union manufacturing jobs and retain even more — from Lansing, Michigan, to Fort Valley, Georgia — by helping auto companies retool, reboot, and rehire in the same factories and communities." This statement highlights the administration's vision for the initiative, emphasizing job creation and economic revitalization as the American auto industry pivots to new technologies.

$2B to help the American auto industry pivot : Support for Auto Workers

Senior administration officials stressed that companies receiving grants must commit to supporting auto workers by partnering with local unions and offering benefits such as technical training, childcare, retirement, and transportation. According to the DOE, the award selections will still be subject to negotiations with the companies and project sponsors.

Ensuring Competitiveness

"There is nothing harder for a manufacturing community than to lose jobs to foreign competition and a changing industry," U.S. Secretary of Energy Jennifer M. Granholm said. "Even as our competitors invest heavily in electric vehicles, these grants ensure that our automotive industry stays competitive — and does it in the communities and with the workforce that have supported the auto industry for generations." Granholm's statement underscores the strategic importance of the initiative in maintaining the competitiveness of the American auto industry.

$2B to help the American auto industry pivot : Specific Grant Awards

Several key projects were highlighted as part of the announcement. For example, Stellantis will receive approximately $334.8 million to convert its shuttered Belvidere, Illinois, plant into an electric-vehicle battery facility, expected to reemploy around 1,450 unionized workers. The company will also get nearly $250 million to retrofit a Kokomo, Indiana, plant to produce electric drive modules.

General Motors will receive $500 million to transform its Lansing Grand River Assembly Plant in Michigan from producing internal combustion engine vehicles to electric vehicles. Volvo was chosen to receive $208 million to upgrade three manufacturing facilities in Pennsylvania, Virginia, and Maryland, enhancing their capacity for battery electric and fuel-cell electric vehicles.

Additionally, Cummins Inc. will receive $75 million to convert its Columbus Engine Plant in Indiana for zero-emissions components and electric powertrain systems. Other recipients include Blue Bird Body Co. and Harley-Davidson Inc., which will receive $80 million and $89 million, respectively, for their electric vehicle manufacturing projects.