According to Reuters, the U.S. government announced on July 11 that it plans to grant nearly $1.1 billion to General Motors and Stellantis to transform existing plants for the production of electric vehicles and components.
The U.S. Department of Energy (DOE) announced plans to provide $1.7 billion in funding to upgrade 11 "at-risk" factories across eight states. This initiative aims to achieve the national goal of producing 1 million electric vehicles annually, retain 15,000 existing jobs, and create 3,000 new positions.
U.S. Secretary of Energy Jennifer Granholm stated that these grants are "a hallmark of the Biden administration's industrial strategy" and will "modernize America's historic automotive manufacturing facilities."
Granholm added that it has been evident for over a decade that automakers need a federal partner to embrace the future, especially to compete with other countries subsidizing their automotive industries. This massive investment aims to fulfill that role.
These grants will be distributed to factories in Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia-several of which are crucial in the upcoming presidential election in November. President Joe Biden has urged U.S. automakers to assemble more electric vehicles, introducing new tax incentives and funding for building electric vehicle charging stations. Regulatory agencies have also issued stricter emission standards to boost electric vehicle sales.
Former President Donald Trump has harshly criticized the Biden administration's electric vehicle policies and promised to overturn them if elected president. The White House is courting union workers in swing states and attempting to assure auto workers that electric vehicles will not result in job losses.
Under the new government grants, General Motors will receive $500 million to convert its Lansing Grand River Assembly Plant in Michigan into an electric vehicle facility, with no specific timeline provided. General Motors indicated that it might internally invest in the plant to produce electric vehicles in the future, but for now, it will continue manufacturing the Cadillac CT4 and CT5.
Last October, Stellantis agreed to sign a new union contract and invest $3.2 billion to build a new battery plant and $1.5 billion to construct a new mid-size truck plant in Belvidere, Illinois. This project has been heavily promoted by the Biden administration.
The DOE plans to provide Stellantis with $334.8 million to transform the closed Belvidere Assembly Plant for electric vehicle production. Additionally, the DOE intends to grant Stellantis $250 million to convert its transmission plant in Kokomo, Indiana, into a facility for producing electric vehicle components. Stellantis stated that the anticipated grants are "an important step in continuing to expand the company's electric vehicle offerings."
Hyundai Mobis, which supplies auto parts to Stellantis from its Ohio plant, will receive $32 million to produce plug-in hybrid vehicle components and battery packs at that facility.
Furthermore, the DOE will grant $89 million to Harley-Davidson to expand its York, Pennsylvania, plant for electric motorcycle production. Blue Bird will receive $80 million to convert a former plant in Georgia into an electric school bus manufacturing facility. Cummins will receive $75 million to retrofit an existing plant in Indiana to produce zero-emission components and electric drivetrains.
Additionally, the DOE plans to provide $208 million to the Volvo Group to upgrade plants in Maryland, Virginia, and Pennsylvania to increase electric vehicle production capacity. ZF North America will receive $157 million to retrofit part of its Marysville, Michigan, facility for electric vehicle component production. Before finalizing these grants, the DOE must negotiate with the companies on expected targets and other requirements, and the companies must pass environmental reviews.
