By David Shepardson
WASHINGTON (Reuters) – The Biden administration plans to award General Motors and Chrysler-parent Stellantis nearly $1.1 billion in grants to convert existing plants to build electric vehicles and components, it said on Thursday.
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 to enable the production of 1 million EVs annually, help retain 15,000 existing jobs, and create 3,000 new positions.
Energy Secretary Jennifer Granholm told reporters the awards were a “hallmark of the Biden administration’s industrial strategy” and would “modernize historical auto manufacturing facilities.”
She said it had become clear more than a decade ago that automakers, to embrace the future, “needed a federal partner especially to compete with other countries who were subsidizing their auto industries and that’s what this massive investment is all about.”
The awards are for plants in Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia — several of which are crucial in the November presidential election.
President Joe Biden has prodded U.S. automakers to assemble a rising number of EVs, introduced new tax incentives and funded EV charging stations. Regulators have also issued stricter emissions rules that will boost EV sales.
Donald Trump has harshly criticized Biden’s EV policies and vowed to reverse them if he takes office. The White House is courting union workers in key battleground states and seeking to reassure autoworkers that EVs will not cost jobs.
General Motors will receive $500 million to convert its Lansing Grand River Assembly Plant in Michigan to EVs at an unspecified future date. GM said it will make its own unspecified investment to produce EVs in Lansing at a future date but said 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 under a new union contract — a project Biden has touted.
The DOE plans to award Stellantis $334.8 million to convert the shuttered Belvidere Assembly plant to build EVs and $250 million to convert its Indiana Transmission Plant in Kokomo to produce EV components. Stellantis said the expected awards were “an important step in continuing to expand our electrified vehicle offerings.”
Hyundai Mobis, which operates a Stellantis supplier in Ohio, will receive $32 million to produce plug-in hybrid components and battery packs.
Other awards include $89 million for Harley-Davidson to expand its York, Pennsylvania plant for EV motorcycle manufacturing; $80 million for Blue Bird to convert a former Georgia plant to build electric school buses; and $75 million to engine company Cummins to convert part of an existing Indiana plant to make zero-emission components and electric powertrain systems.
The DOE also plans $208 million for the Volvo Group to upgrade plants in Maryland, Virginia and Pennsylvania to increase EV production capacity and $157 million for ZF North America to convert part of its Marysville, Michigan plant for EV component production.
The DOE must still complete negotiations with companies on milestones and other requirements and complete environmental reviews before the awards are finalized.
(Reporting by David Shepardson; Editing by Janane Venkatraman)
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