Biden Admin Cuts Another Huge Check For Automakers To Go Electric As EV Market Struggles

The Biden administration announced Thursday that it is spending billions of dollars more to help automakers mass-produce electric vehicles (EVs).

The Department of Energy (DOE) is spending $1.7 billion to help manufacturers convert closed or struggling manufacturing facilities to produce EVs or EV components in eight states, including swing states like Pennsylvania and Georgia, as the American EV market struggles. The funding complements $12 billion the DOE unveiled in August 2023 to help major manufacturers retrofit plants for EV production, and the agency projects that the cash announced Thursday will allow for the retention of 15,000 union workers while creating nearly 3,000 jobs.

All of the selected companies expect to partner with local unions, according to the DOE. The selectees will provide workers with things like job training, childcare and retirement benefits.

Fiat-Chrysler, a major manufacturer with a market cap of about $25 billion, is set to receive more than $334 million for its plant in Belvidere, Illinois, and nearly $250 million for its facility in Kokomo, Indiana. Harley Davidson is poised to get $89 million for EV conversion at a plant in York, Pennsylvania, while Volvo is set to reap about $208 million to boost zero-emissions truck production across facilities in Pennsylvania, Virginia and Maryland.

The administration has made a major effort to force EVs on American consumers over the next decade, using stringent regulation and billions of taxpayer dollars to do so. However, major automakers are losing considerable sums of money on their EV product lines, while recent surveys indicate that many Americans — including those who already own EVs — are not fully sold on EVs’ merits relative to internal combustion engine models.

Moreover, the U.S. EV market is at a “low-tide moment,” according to a May analysis by J.D. Power, and used EV prices have fallen by 16.6% over the last year, according to Axios.

The funding announced Thursday is still subject to negotiations between the government and the firms, which are expected to meet certain “commitments to workers and communities,” according to the DOE. The spending also aligns with the Biden administration’s “Justice40” agenda, which holds that at least 40% of the overall benefits of certain environmental spending flow to “disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.”

“President Biden set out to build a clean energy economy that benefits everyone,” John Podesta, one of the most influential climate advisers in the Biden administration, said of the funding. “Today’s awards from the Department of Energy help bring that vision to life by investing in the future of the auto industry, creating thousands of good-paying union jobs, and tackling the existential threat of climate change by cutting pollution from the transportation sector.”