US to Offer Automakers USD12bn in Funding for EV Transition

The US government has announced a significant financial commitment to support the automotive industry’s transition to electric and hybrid vehicle manufacturing. As reported by Reuters on August 31, the government will provide USD12bn in grants and loans to assist auto manufacturers and their suppliers in upgrading their manufacturing facilities for the production of electric and hybrid vehicles. Energy Secretary Jennifer Granholm stated that a substantial portion of this funding, approximately USD10bn, will come from an advanced-vehicle manufacturing program managed by the Department’s Loan Programs Office. The remaining USD2bn will be allocated from funds designated in the Inflation Reduction Act (IRA), which was enacted last year. The primary objective of this financial support is to aid in the creation of jobs in traditional auto manufacturing communities during the industry’s shift toward electric vehicles (EVs).

In addition to supporting manufacturing facility upgrades, the Energy Department plans to provide USD3.5bn in financing to build a domestic supply chain for auto battery manufacturing and expand the national power grid. These initiatives are part of the Biden Administration’s efforts to achieve its ambitious target for more than 50% of all new cars sold in 2030 to be battery-electric, plug-in hybrid, or fuel cell-powered.

Sources:

https://www.reuters.com/business/autos-transportation/us-offers-12-billion-automakers-suppliers-make-advanced-vehicles-2023-08-31/

https://www.bloomberg.com/news/articles/2023-08-31/us-providing-up-to-12-billion-to-retrofit-auto-plants-for-evs?srnd=green

https://www.wsj.com/business/autos/auto-industrys-shift-to-evs-gets-12-billion-boost-da2abf3b

https://www.reuters.com/business/autos-transportation/biden-set-target-50-evs-by-2030-industry-backs-goal-2021-08-05/