The Biden administration has earmarked $12 billion in funding to aid automakers and suppliers in updating their facilities for electric vehicle (EV) production, as announced by Energy Secretary Jennifer Granholm, previously the governor of Michigan, a pivotal car-producing state.
“While we transition to EVs, we want to ensure that workers can transition in place, that there is no worker, no community left behind,” Granholm told reporters in a call. Vehicle manufacturers will receive speeding grants and other subsidies that will fund the conversion of existing manufacturing plants to build EVs in a move that could help blunt criticism from automakers and the United Auto Workers (UAW) union over tough environmental rules that will be applied in the EV era.
The UAW has warned that a too rapid transition from ICE to EVs could put thousands of jobs at risk in key states such as Michigan, Ohio, Illinois and Indiana. The administration will also offer $3.5 billion in funding to domestic battery manufacturers, Granholm has revealed. Additionally, advanced vehicles will receive $2 billion in grants from the Inflation Reduction Act as well as $10 billion in loans from the Energy Department’s Loans Program Office.
UAW President Shawn Fain has applauded the announcement, saying the grants and loans “makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.”
Whereas there will be no specific labor requirements for auto companies to obtain government funding, projects with better labor conditions stand a greater chance of their petitions being successful, an Energy Department official has said, according to US media reports.