Much of that money comes from President Biden’s 2022 signature The climate bill, the Inflation Reduction Act, also provides tax credits of up to $7,500 for consumers who want to buy electric vehicles. Trump has falsely claimed that electric vehicles don’t work and promised to gut Biden’s policies on them at an April meeting with oil industry donors.
The 11 plants are spread across eight states, including key 2024 election battlegrounds such as Georgia, Michigan, Ohio and Pennsylvania. All of the facilities are unionized, unlike many electric vehicle plants in Southern states that are less union-friendly.
Facing pressure from within his own party to give up reelection, Biden has sought to highlight the staunch support of labor unions, a key Democratic constituency. The president met Wednesday with the executive board of the AFL-CIO, the nation’s largest union federation, though that invitation was extended before his disastrous debate performance last month.
“Building a clean energy economy can and must be a win-win for union autoworkers and automakers,” Biden said in a statement Thursday. “This investment will create thousands of good-paying union manufacturing jobs and retain even more—from Lansing, Michigan, to Fort Valley, Georgia—by helping automakers retool, restart, and rehire in the same factories and communities.”
Without mentioning Trump by name, Biden added that these communities “were abandoned by my predecessor and are now making a comeback with the support of my policies.” During his campaign, Trump accused Biden of offshoring American jobs and promised to “take jobs out of China and bring them back to Michigan.”
The funding announced Thursday is not final and is contingent on the success of negotiations with the companies. If approved, it could create more than 2,900 new jobs while preserving more than 15,000 unionized positions at risk of being eliminated, the Energy Department said.
“This announcement is a hallmark of the Biden administration’s industrial strategy, which aims to bring manufacturing jobs back to America after years of offshoring,” Energy Secretary Jennifer Granholm said on a call Wednesday with reporters outlining the announcement.
The funding comes amid growing concern in Washington about China’s dominance of global supply chains for electric vehicles and their components. To prevent a flood of cheap Chinese EVs from hurting domestic industry, Biden in May quadrupled tariffs on Chinese electric vehicles to 100%.
The announcement comes as major automakers are chipping away at Tesla’s once-dominant share of the U.S. electric vehicle market. For the first time, Tesla’s market share fell below 50% in the second quarter of this year, even as overall electric vehicle sales set a record, according to estimates released Tuesday by research firm Cox Automotive.
The largest amount announced Thursday — $500 million — will help General Motors convert its Lansing, Michigan, plant from producing internal combustion engine vehicles to electric vehicles. The Energy Department said the investment is expected to help the plant retain more than 650 jobs while creating 50 new jobs.
Another $89 million will go to retooling the Harley-Davidson plant in York, Pennsylvania, to make electric motorcycles. And $32.6 million will go to American Autoparts Inc., a subsidiary of Hyundai Mobis, to make plug-in hybrid cars and trucks in Toledo.
Many of these facilities face a real risk of closure without the infusion of federal funds, said Sam Abuelsamid, an electric vehicle expert at market research firm Guidehouse Insights.
“If we assume that the adoption of electric vehicles will continue, there will be less and less need for manufacturing capacity for components specific to internal combustion engine vehicles,” Abuelsamid said.
A race against time
Beyond the Department of Energy, agencies across the federal government are racing to allocate the remainder of their climate money before the end of Biden’s first term.
John D. Podesta, the president’s senior adviser for international climate policy, said some of the money from the Inflation Reduction Act was earmarked for future years. But he said about 92 percent of the major grant programs had been launched and about 60 percent of the grants had been awarded.
“The agencies have done an extraordinary job of launching entirely new programs,” Podesta told reporters Tuesday on the sidelines of a climate event at the Canadian Embassy.
However, some climate advocates and clean energy companies, say one A crucial office within the Department of Energy has made less progress than they expected had hoped to issue green loans rather than grants.
The Climate Act allowed the Office of Lending Programs to lend an additional $200 billion to next-generation energy projects, including solar farms, hydrogen power plants and lithium mines. So far, the office has approved just over $27 billion, and it still has about $215.7 billion left to lend.
Charisma Troiano, a spokeswoman for the Energy Department, said it took time for the Biden administration to hire more staff for the office, which was largely dormant under the Trump administration. It also takes time for the office to conduct a rigorous analysis of each loan application, she said.
“Thanks to President Biden’s Investing in America program, the LPO is now firing on all cylinders and the office’s application pipeline is stronger than ever, helping to support all aspects of the nation’s clean energy manufacturing renaissance,” Troiano said in an email.
Under President Barack Obama, the Office of the Loan Programs had a resounding success when it lent $465 million to Tesla The company decided to open its first factory in Silicon Valley. But it faced fierce criticism from congressional Republicans in 2011, when solar panel maker Solyndra filed for bankruptcy after receiving $535 million in federal loan guarantees, leaving 1,100 people out of work and taxpayers on the hook.
Trevor Dolan, director of industrial and workforce policy at Evergreen Action, an environmental group, said the Biden administration faces an inherent tension when distributing climate funds. If agencies move too slowly, a second Trump administration could claw back unspent funds. If it moves too quickly, Biden could face a Solyndra-style scandal or leave communities and workers behind.
“We know that a Trump presidency poses an existential threat to climate action, so it’s critical that we get these funds out before the election,” Dolan said. “… But agencies are doing a tremendous amount of due diligence on this. They’re not spending money without a concern for creating good jobs or advancing broader goals.”
The Environmental Protection Agency (EPA) released $27 billion in April. The money comes from the Greenhouse Gas Reduction Fund, which aims to leverage public and private funds to invest in clean energy technologies such as solar panels, heat pumps and more.
“EPA continues to work quickly and prudently to design, open for competition, select for award and obligate these funds,” EPA spokesman Tim Carroll said in an email. “The agency anticipates that more than $32 billion in funds will be obligated by the end of the year.”
The $1.7 billion announced Thursday comes from the Domestic Manufacturing Conversion Grant program, which ranks in the top third of Inflation Reduction Act programs in terms of size, said a White House official who spoke on condition of anonymity because he was not authorized to comment publicly.
A second Trump administration would have a hard time getting that money back once it’s officially allocated. But if Trump rolls back Biden’s measures to encourage EV adoption, it could further cast a pall of uncertainty over who gets the funding, said Karl Brauer, executive analyst at iSeeCars.com.
“This is where the downside of our four-year election cycle comes into play,” Brauer said. “Whether you like electric vehicles or not, it’s really a waste to invest money in electric vehicles for four years and then have to wait another four years to change direction.”