The Biden administration has announced plans to allocate approximately $1.1 billion in grants to Stellantis and General Motors to convert existing plants and build electric vehicles and components. The Department of Energy (DOE) announced $1.7 billion in planned grants to help fund the conversion of 11 ‘at-risk’ plants in eight states, aimed at enabling the production of 1 million electric vehicles annually, helping to maintain 15,000 existing jobs and create 3,000 new ones.
Stellantis will receive grants from the U.S. government to convert facilities and produce electric cars
Energy Secretary Jennifer Granholm told reporters that these grants represent a “hallmark of the Biden administration’s industrial strategy” and will “modernize historic automotive manufacturing plants.” She also stated that over a decade ago, it became clear that automakers, to embrace the future, “needed a federal partner, especially to compete with other countries that were subsidizing their auto industries,” which is the main reason behind this massive investment.
The awards are intended for plants located in Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia, many of which will be crucial for the November presidential elections. President Joe Biden has pushed U.S. automakers to increase electric vehicle production, introduced new tax incentives, and funded the development of electric vehicle charging stations. Additionally, regulators have introduced stricter emissions regulations, which should further stimulate sales of zero-emission vehicles.
Donald Trump has harshly criticized Biden’s electric vehicle policies and promised to reverse them if he takes office. The White House is courting unionized workers in key swing states and is seeking to reassure auto workers that electric vehicles will not cost jobs.
General Motors will receive $500 million to convert its Lansing Grand River assembly plant in Michigan to electric vehicles at an unspecified future date. GM said it will make its own unspecified investment to produce electric vehicles but stated that the plant will continue to produce the Cadillac CT4 and CT5. In October, Stellantis agreed to build a new $3.2 billion battery plant and invest $1.5 billion in a new mid-size truck factory in Belvidere, Illinois, as part of a new union contract, a project touted by Biden.
The Department of Energy (DOE) plans to award Stellantis $334.8 million to convert the closed Belvidere assembly plant into a center for electric vehicle production, and $250 million to convert the Indiana transmission plant in Kokomo for electric vehicle component production. Stellantis said these funds are ‘an important step to continue expanding our electric vehicle offering.’ Additionally, Hyundai Mobis, a Stellantis supplier in Ohio, will receive $32 million to produce plug-in hybrid components and battery packs.
Other grants include $89 million to Harley-Davidson to expand its York, Pennsylvania plant for electric motorcycle production; $80 million to Blue Bird to convert a former plant in Georgia to build electric school buses; and $75 million to engine company Cummins to convert part of an existing plant in Indiana to produce zero-emission components and electric propulsion systems.
The Department of Energy also plans to allocate $208 million to the Volvo Group for modernizing plants in Maryland, Virginia, and Pennsylvania to increase electric vehicle production capacity, and $157 million to ZF North America to convert part of its Marysville, Michigan plant to produce electric vehicle components. The DOE still needs to complete negotiations with companies on milestones and other requirements and complete environmental reviews before the awards are finalized.