US Dedicates $12 Billion to Retrofit Auto Plants for EVs

Energy Department Also Plans $3.5 Billion to Expand Domestic Battery Manufacturing
Ford F-150 Lightning on a production line
A Ford F-150 Lightning on the production line. The funding can be used for factories that make efficient hybrid, plug-in electric hybrid, plug-in electric drive and hydrogen fuel-cell vehicles as well. (Emily Elconin/Bloomberg News)

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The Biden administration is making up to $12 billion available for automakers to retrofit their facilities to make electric vehicles and hybrids.

The funding comes amid tense negotiations between Detroit auto companies and the United Auto Workers, which has said the transition to EVs threatens union jobs. It includes $10 billion in newly announced funds from a U.S. Energy Department loan program for clean vehicles. The Energy Department also said it’s planning to make available an additional $3.5 billion in financing to expand domestic battery manufacturing for vehicles and the nation’s power grid.

Energy Secretary Jennifer Granholm vowed Aug. 31 the U.S. wouldn’t leave American autoworkers behind, telling reporters the funding will support projects in long-standing automaking communities to help retain workers amid the transition.

The funding is a sign the Biden administration is doubling down on the shift to EVs to remake the auto industry despite criticism from the biggest autoworkers union. The UAW’s new president, Shawn Fain, warned the White House earlier this month not to push EVs at the expense of blue-collar jobs. The union, which is in the middle of contentious talks with the three legacy Detroit automakers over a new four-year contract, blasted a June announcement of a $9.2 billion federal loan to a Ford joint venture as a gateway to “low-road jobs.”


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“The EV transition must be a just transition that ensures auto workers have a place in the new economy,” Fain said Aug. 31 in an emailed statement. 

“This funding will help existing workers keep their jobs and have the first shot to fill new good jobs as the car industry transforms for future generations,” President Joe Biden said in a statement.

Shares of General Motors Co. and Ford Motor Co. both extended gains on the news. Stellantis NV shares traded in New York fell 1.2% to $18.51 as of 12:53 p.m.

In addition to electric vehicles, the financing can be used for factories that make efficient hybrid, plug-in electric hybrid, plug-in electric drive and hydrogen fuel-cell vehicles, the department said.

The funding, which also includes $2 billion in “manufacturing conversion grants” from Biden’s signature climate law, comes amid a broader administration goal of having EVs represent at least half of all new car sales in the U.S. by 2030.

The Alliance for Automotive Innovation, which represents most major auto manufacturers in Washington, said in a statement the 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.”

A spokesperson for General Motors Co., which has pledged to electrify its entire fleet by 2035, said the carmaker supports public funding that promotes “domestic investment in manufacturing.” Representatives for Ford and Stellantis NV, which owns the Jeep and Ram brands, said their companies were reviewing the announcement. 

— With assistance from Chester Dawson and Keith Laing.

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