Biden unveils $1.7 billion to boost EV production at U.S. auto factories (2024)

The 11 factories are scattered across eight states, including battleground states in the 2024 election such as Georgia, Michigan, Ohio and Pennsylvania. All of the facilities are unionized, unlike many EV plants in Southern states less friendly to union labor.

Facing pressure from his own party to drop his reelection bid, Biden has sought to showcase his enduring support from unions, a critical Democratic constituency. The president met Wednesday with the executive council of the AFL-CIO, the country’s largest federation of trade unions, although that invitation was extended before his disastrous debate performance last month.

“Building a clean energy economy can and should be a win-win for union autoworkers and automakers,” Biden said in a statement Thursday. “This investment will create thousands of good-paying, union manufacturing jobs and retain even more — from Lansing, Michigan to Fort Valley, Georgia — by helping auto companies retool, reboot and rehire in the same factories and communities.”

Without mentioning Trump by name, Biden added that these communities “were left behind by my predecessor and are now making a comeback with the support of my policies.” In his campaign, Trump has accused Biden of offshoring U.S. jobs and has promised to “take jobs out of China and bring jobs back to Michigan.”

The funding announced Thursday is not final and is conditional upon successful negotiations with the companies. If awarded, it could create more than 2,900 jobs while saving more than 15,000 union positions at risk of being eliminated, the Energy Department said.

“This announcement is a hallmark of the Biden administration’s industrial strategy, which is a strategy to bring manufacturing jobs back to America after years of offshoring,” Energy Secretary Jennifer Granholm said during a Wednesday call with reporters previewing the announcement.

The funding comes amid mounting anxiety in Washington about China’s dominance of global supply chains for EVs and their components. In a bid to prevent a flood of low-cost Chinese EVs from hurting domestic manufacturing, Biden in May quadrupled tariffs on Chinese EVs to 100 percent.

The announcement also comes as major automakers chip away at Tesla’s once-commanding share of the U.S. EV market. For the first time, Tesla’s share of the market fell below 50 percent in the second quarter of this year, even as overall EV sales set a record, according to estimates released Tuesday by the research firm Cox Automotive.

The largest chunk of money announced Thursday — $500 million — will help General Motors convert its plant in Lansing, Mich., from producing internal combustion engine vehicles to EVs. The Energy Department said the investment is expected to allow the plant to retain more than 650 jobs while creating 50 jobs.

An additional $89 million will help Harley-Davidson retool its factory in York, Pa., to manufacture electric motorcycles. And $32.6 million will go to American Autoparts Inc., a subsidiary of Hyundai Mobis, to make plug-in hybrid electric cars and trucks in Toledo.

Many of these facilities faced a real risk of closure without the infusion of federal cash, said Sam Abuelsamid, an EV expert at the market intelligence firm Guidehouse Insights.

“Assuming we have continued uptake of EVs, there will be less and less need for manufacturing capacity for the components that are specific to internal combustion engine vehicles,” Abuelsamid said.

A race against the clock

Beyond the Energy Department, agencies across the federal government are rushing to award the rest of their climate cash before the end of Biden’s first term.

John D. Podesta, senior adviser to the president for international climate policy, said some Inflation Reduction Act money is reserved for future years. But he said around 92 percent of major grant programs have launched and nearly 60 percent of grants have been awarded.

“The agencies have done an extraordinary job of launching what are brand-new programs,” Podesta told reporters Tuesday on the sidelines of a climate event at the Canadian Embassy.

Some climate advocates and clean energy companies, however, say a crucial office within the Energy Department has made less progress than they had hoped toward issuing green loans, rather than grants.

The climate law empowered the Loan Programs Office to lend an additional $200 billion to next-generation energy projects, including solar farms, hydrogen plants and lithium mines. So far, the office has approved a little more than $27 billion, and it still has an estimated $215.7 billion left to lend.

Energy Department spokeswoman Charisma Troiano said it took time for the Biden administration to hire more staff for the office, which was largely dormant under the Trump administration. It also takes time for the office to conduct a rigorous analysis of each loan application, she said.

“Thanks to President Biden’s Investing in America agenda, LPO is firing on all cylinders now and the office’s application pipeline is stronger than ever, helping support all aspects of the nation’s clean energy manufacturing renaissance,” Troiano said in an email.

Under President Barack Obama, the Loan Programs Office had a high-profile success when it loaned $465 million to Tesla to open its first factory in Silicon Valley. But it faced fierce criticism from congressional Republicans in 2011, when the solar panel manufacturer Solyndra filed for bankruptcy after receiving $535 million in federal loan guarantees, leaving 1,100 people out of work and taxpayers on the hook.

Trevor Dolan, senior industry and workforce policy lead at Evergreen Action, an environmental group, said the Biden administration faces an inherent tension when doling out climate money. If agencies move too slowly, a second Trump administration could claw back unspent funds. Too quickly, and Biden could face a Solyndra-like scandal or leave communities and workers behind.

“We know that a Trump presidency poses an existential threat to climate action, so getting out this funding between now and the election is crucial,” Dolan said. “... But agencies are putting extensive due diligence into this. They’re not pushing money out the door without regard for creating good jobs or advancing broader goals.”

At the Environmental Protection Agency, $27 billion went out the door in April. The money comes from the Greenhouse Gas Reduction Fund, which seeks to leverage public and private dollars to invest in clean energy technologies such as solar panels, heat pumps and more.

“EPA continues to work quickly and prudently to design, open for competition, select for award, and obligate these funds,” EPA spokesman Tim Carroll said in an email. “The Agency anticipates that more than $32 billion in funds will be obligated by the end of the year.”

The $1.7 billion announced Thursday comes from the Domestic Manufacturing Conversion Grants program, which ranks in the top third of Inflation Reduction Act programs in terms of size, said a White House official who spoke on the condition of anonymity because he was not authorized to comment publicly.

A second Trump administration would have trouble clawing back this money once it is formally awarded. But if Trump repeals Biden’s policies aimed at spurring EV adoption, it could still cast a pall of uncertainty over recipients of this funding, said Karl Brauer, executive analyst at iSeeCars.com.

“This is where the downside of our four-year election cycle rears its ugly head,” Brauer said. “Whether or not you like EVs, it’s really wasteful to plow money into EVs for four years and then have another four-year time frame where you change direction.”