Sep 1, 2023 - Energy & Environment

White House launches billion-dollar effort to speed EV production

Illustration of an electrical plug and cord forming the shape of a dollar sign.

Illustration: Gabriella Turrisi/Axios

The White House has launched a fresh attempt to speed domestic electric vehicle production while allaying labor fears about the transition from gasoline to plugs.

Catch up fast: The Energy Department plans to provide up to $10 billion in loans and $2B in grants to help automakers convert factories to produce EVs, plug-in hybrids and more.

  • It's also planning a separate $3.5B for expanding domestic production of batteries, components and materials.
  • The funding is mostly from the 2022 climate law and 2021 bipartisan infrastructure bill.

The intrigue: The rollout arrives amid tense contract talks between the United Auto Workers — which has been critical of some White House EV policies — and Detroit automakers. The current contract expires Sept. 14.

Why it matters: The Energy Department signaled it will make funding decisions with organized labor in mind.

  • Conversion grants will prioritize projects that retain collective bargaining deals and/or applicants with wages in the top industry quartile.
  • Loans, likewise, will focus on projects that "retain high-quality jobs" in current manufacturing areas.
  • The eventual battery grants have similar priorities. That's important because autoworkers are fearful that manufacturers' battery ventures won't have strong enough pay.

What they're saying: John Miller of TD Cowen Washington Research Group said the timing signals a White House attempt to intervene in the labor talks, calling the UAW the target audience.

  • While negotiations are focused on near-term pay and benefits, "the lingering background concern" is the number of workers needed for EVs compared to internal combustion models, he said.
  • Miller, in a note, also said it could be an effort to ease automakers' concerns about brewing EPA rules that aim to make EVs two-thirds of light-duty sales by 2032.
  • He calls the funding announcement an "olive branch" to help lower capital costs of aggressive regulatory targets.

What we're watching: Which companies and projects get the money as applications and awards unfold.

The bottom line: The White House wants to avoid a collision between climate and labor goals.

This story first appeared in the Axios Generate energy and climate newsletter. Subscribe.

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