The U.S. Department of Energy announced on Aug. 31 a $15.5-billion package of funding and loans primarily focused on retooling existing factories for the transition to electric vehicles (EVs)—supporting good jobs and a just transition to EVs.
The funding includes making available $2 billion in grants and up to $10 billion in loans to support automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host these manufacturing facilities. In the Domestic Conversion Grant Program, higher scores will be given to projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry.
The Department also announced a Notice of Intent to make available $3.5 billion in funding to expand domestic manufacturing of batteries for electric vehicles and the nation’s grid, as well for battery materials and components currently imported from other countries.
The Notice of Intent outlines how DOE will support the growing domestic industry while also supporting manufacturing workers and promoting equity and environmental justice.
“President Biden is investing in the workforce and factories that made our country a global manufacturing powerhouse,” said U.S. Secretary of Energy Jennifer M. Granholm. “Today’s announcements show that President Biden understands that building the cars of the future also necessitates helping the communities challenged by the transition away from the internal combustion engine.”
Depending on their capital needs, manufacturers can apply to receive assistance via financial grants through DOE’s Office of Manufacturing and Energy Supply Chains (MESC) or preferable debt financing through DOE’s Loan Program Office.
Converting and Retrofitting America’s Manufacturing Plants
DOE announced a new $2-billion funding opportunity to spur the conversion of long-standing facilities to manufacture electric vehicles and components. Supported by President Biden’s Inflation Reduction Act, the Domestic Manufacturing Conversion Grants for electrified vehicles program, will provide cost-shared grants for domestic production of efficient hybrid, plug-in electric hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles. This program will expand manufacturing of light-, medium-, and heavy-duty electrified vehicles and components and support commercial facilities including those for vehicle assembly, component assembly and related vehicle part manufacturing.
The program aims to support a just transition for workers and communities in the transition to electrified transportation, with particular attention to communities supporting facilities with longer histories in automotive manufacturing. Preference will also be given to projects that commit to pay high wages for production workers and maintain collective bargaining agreements, Department of Energy officials stated.
Projects selected for this funding must also contribute to the President’s Justice40 Initiative, which aims to advance diversity, equity, inclusion, and accessibility in America’s workforce and ensure every community benefits from the transition to a clean energy future. This funding supports goals and targets detailed in the 100-day reviews under Executive Order 14017 “America’s Supply Chains and the Federal Consortium for Advanced Batteries’ National Blueprint for Lithium Batteries,” which provides a path to building a strong domestic battery supply chain and accelerating the development of a robust, secure, and equitable domestic industrial base by 2030.
Concept papers are due Oct. 2, 2023, and the deadline for full applications is Dec. 7, 2023.
Leveraging Loan Authority for Automotive Manufacturing Conversion Projects
DOE is making up to $10 billion in loan authority available for applications under the Advanced Technology Vehicles Manufacturing Loan Program for automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host manufacturing facilities.
Examples include retaining high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete, in the case of facility replacement projects. For projects that seek financing to convert or directly replace an existing factory that has high-quality jobs, DOE will assess the projected economic impacts of the facility conversion relative to the existing facility, including factors such as contribution to the local economy, employment history, anticipated employment, and duration of its existence.
Bolstering American Battery Manufacturing, Strengthening Domestic Supply Chains
DOE also announced its intent to invest approximately $3.5 billion to boost production of advanced batteries and battery materials that are critical to rapidly growing clean energy industries of the future, including electric vehicles and energy storage.
This notice of intent—made possible by the President’s Bipartisan Infrastructure Law—represents the second round of funding for battery materials processing and battery manufacturing grants to support the creation of new, retrofitted, and expanded domestic commercial facilities for battery materials, battery components and cell manufacturing. The Notice of Intent outlines how round II will support growing domestic industry, supporting manufacturing workers and promote equity and environmental justice. The program will support communities with experienced auto workers and a history of producing vehicles, applicants with strong workforce practices, and applicants who plan to create high-quality jobs.
Both the conversion grant funding opportunity and battery manufacturing notice of intent will be administered by MESC.
