The United States Department of Energy is allocating $15.5 billion to facilitate the transition towards electric vehicles (EVs).
The majority of these funds will help automakers and suppliers to produce electric, hybrid, and hydrogen fuel cell electric vehicles. This aligns with a component of President Joe Biden‘s Investing in America plan.
The $15.5 billion package is meant to keep jobs within the communities where these manufacturing facilities currently exist.
A total of $12 billion, $2 billion as grants and $10 billion as loans, will support projects for converting automotive manufacturing for light, medium, and heavy electric vehicles.
Meanwhile, the remaining $3.5 billion will be utilized to expand the domestic production of EV batteries.
The administration aims to strengthen the national power grid and enhance battery materials. This marks the second round of funding provided by the DOE for battery materials and manufacturing.
In recent years, several car manufacturers and battery makers have outlined their intentions to establish battery production facilities within the US.
This move towards domestic production commenced as a response to the disruptions caused by COVID-19.
The enactment of the Inflation Reduction Act in August 2022 further propelled domestic manufacturing efforts. It offers incentives to manufacturers, although detailed guidance from the Treasury is still pending for numerous aspects of the bill’s provisions.
The federal investments align with the administration’s commitment to generating well-paying manufacturing jobs for American citizens, particularly in Georgia, North Carolina, and Tennessee.
Manufacturers will have the opportunity to apply for grants via the DOE’s Office of Manufacturing and Energy Supply Chains. They can also opt for favorable debt financing through the Loan Program Office.
