Biden tosses electric lifeline to auto industry
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Illustration: Maura Losch/Axios
The Energy Department is giving automakers and suppliers nearly $2 billion to save at-risk or shuttered plants — if they convert to serve the electric vehicle market.
Why it matters: The money via the 2022 climate law is among the most direct White House attempts to fuse manufacturing and climate policies.
- And it can't be untethered from politics — some of the 11 facilities are in swing states, including Pennsylvania and Michigan.
Driving the news: Officials on Thursday unveiled preliminary decisions to provide a combined $1.7 billion to help with conversions and retooling projects across eight states for making EVs and related components.
- "This announcement is a hallmark of the Biden administration's industrial strategy, which is a strategy to bring manufacturing and jobs back to America after years of offshoring," Energy Secretary Jennifer Granholm told reporters.
The big picture: Recipients include GM, Stellantis, Volvo, Harley-Davidson and suppliers like American Auto Parts. Officials said it would ensure over 15,000 union workers retain positions, and create roughly 3,000 new jobs.
- The projects together cover a wide swath of the supply chain and market, ranging from parts for electric motorcycles and buses, SUVs, hybrid powertrains, heavy truck batteries and beyond.
- All told, it will enable production of over 1 million "electrified" light-duty vehicles annually — a term that refers to everything from fully electric models to hybrids — and over 40,000 electrified trucks and buses, Granholm said.
Between the lines: The White House is vigorously trying to frame the federal cost-sharing news with a message around the economy, which polling shows is top of mind for voters.
- A "who's who" of top officials, including Granholm, acting Labor Secretary Julie Su, and top climate aide John Podesta, took part in the call. The word "jobs" surfaced dozens of times.
- President Biden, in a statement, name-checked projects in Michigan and Georgia after saying that "building a clean energy economy can and should be a win-win for union autoworkers and automakers."
Our thought bubble, via Axios auto reporter Joann Muller...
- Biden, who calls himself the most pro-union president in history, had to work hard for months to earn the UAW's endorsement — even joining UAW President Shawn Fain on the picket line during last fall's historic strike against Detroit automakers.
- Unionized auto workers worry about job security under Biden's EV policies, but today's huge grants, particularly for Stellantis and GM, will no doubt help ease some of those fears.
The winners: Here are several of the nine proposed "domestic manufacturing conversion grants" that DOE unveiled:
- $500 million for GM to convert a Lansing, Mich., site for EV production.
- Almost $335 million to help Stellantis — parent to Jeep, Chrysler and others — to convert an idled Belvidere, Ill., plant into an EV factory, and another $250 million to transform a Kokomo, Ind., plant from making internal combustion powertrains to electrified versions.
- Nearly $80 million for the school bus company Blue Bird to convert a Fort Valley, Ga., factory to make electric models.
- $75 million for engine maker Cummins to manufacture "zero emissions components" and electric powertrain systems in Columbus, Ind.
What's next: Nothing is final yet. The selections are subject to more negotiations, and if successful the funding then starts arriving in tranches as various milestones are met, officials said.
- A senior administration official told reporters that the negotiation activity "takes a few months."
- Donald Trump is hostile to EVs, calling them out of step with consumer interests. So it's not clear if the election results might affect funding progressions.
