Monday, October 2, 2023
News Biden Administration Allocates $15B to Legacy Automakers to Retrofit Factories for EV...

Biden Administration Allocates $15B to Legacy Automakers to Retrofit Factories for EV Production

The U.S. government’s $15 billion funding aims to support legacy automakers in adapting existing factories for EV manufacturing, encouraging industry transition.


·      The Biden administration allocates $15 billion to retrofit existing factories for EV and battery production.

·      Legacy automakers facing EV transition challenges stand to benefit from grants and loans.

·      The initiative aims to retain jobs, support union workers, and boost domestic EV manufacturing.


In a significant move amidst UAW strikes, the Biden-Harris Administration has unveiled a $15 billion funding initiative to facilitate the adaptation of current factories for electric vehicle (EV) and battery production. The initiative provides a crucial lifeline to legacy automakers that are grappling with profitability challenges during the ongoing transition to electric mobility.

GM Pumps C$280 Million into Oshawa Plant for Future Truck Production | Photo: General Motors

The U.S. Department of Energy (DOE), as part of President Biden’s Investing in America agenda, announced a comprehensive package focused on reshaping manufacturing facilities for the EV era. This allocation comprises grants and loans for retooling existing factories, ensuring the retention of valuable employment opportunities within communities hosting these manufacturing sites.

In 1996 General Motors acquired the Renaissance Center to house
Renaissance Center, GM’s Detroit Headquarters | Photo: General Motors

The funding distribution includes $2 billion in grants and up to $10 billion in loans designated to support automotive manufacturing conversions, safeguarding high-quality jobs in areas where these manufacturing facilities are located. Additionally, the DOE disclosed a Notice of Intent, outlining plans to allocate $3.5 billion to bolster domestic battery manufacturing for both EVs and the national grid.

Ford Headquarters Dearborn, Michigan | Photo: Ford

The initiative’s emphasis on retrofitting existing factories is particularly beneficial to legacy automakers currently navigating the challenge of generating profits from EV sales during their manufacturing transformation. Furthermore, this initiative could potentially extend its support to electric vehicle startups that have repurposed facilities formerly engaged in internal combustion engine vehicle production, such as Rivian’s use of a former Mitsubishi plant in Illinois for manufacturing its electric trucks.

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However, a degree of favoritism toward legacy automakers is evident, as the administration prioritizes projects employing union workers in the grant program. The Domestic Conversion Grant Program prioritizes projects that retain collective bargaining agreements and those with an established high-quality, well-compensated hourly production workforce.

Tesla factory
Tesla Gigafactory, Nevada | Photo: Tesla

While favoring union workers echoes the administration’s previous efforts, like the federal tax credit reform, the move underscores the government’s commitment to supporting legacy automakers, including GM and Ford, which employ a substantial number of unionized workers. The funding also presents an opportunity for Tesla’s competitors, who have wrestled with unionization, to strengthen their foothold in the evolving EV landscape.

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