The Biden administration will put up to $12 billion into converting auto manufacturing facilities into plants for hybrid and electric vehicles, it announced Thursday.
Automakers will be able to receive loans or grants to convert their factories into those that make plug-in electric, hybrid, or hydrogen fuel cell vehicles, Energy Secretary Jennifer Granholm told reporters Thursday.
A total of $10 billion will come from the Energy Department’s Loan Program Office and an additional $2 billion coming from Inflation Reduction Act grants. The loan program was also bolstered by the Democrats’ climate, tax and health care bill.
The Department will also make an additional $3.5 billion available for domestic battery manufacturing that was made possible by the Bipartisan Infrastructure Law.
“For a hundred years, America has been home to the best automakers in the world. We have got to be using their will and their skill to dominate the global EV market,” Granholm said.
Broadly, the Biden administration has sought to advance more fuel efficient vehicles and a shift toward electric vehicles as part of an effort to combat climate change through funding opportunities, tax credits and regulations.
A proposed rule from the Environmental Protection Agency projects that, if it is implemented, two-thirds of new vehicle sales could be electric by 2032.
The Energy Department said that both sets of funding announced Thursday will prioritize good working conditions, including facilities that pay high wages and commit to retaining or expanding collective bargaining agreements. However, there will be no specific requirements needed to get the funding, Betony Jones, the director of the office of energy jobs confirmed.
That announcement comes as labor concerns bubble up in the transition to clean energy — with the United Auto Workers union accusing industry of using the transition to cut wages and pushing the Biden administration to do more about it.
In a written statement, the union praised the administration’s announcement.
“We are glad to see the Biden Administration doing its part to reject the false choice between a good job and a green job. This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won,” union president Shawn Fain said in a written statement.
Updated at 6:12 p.m.