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DOE announces $15.5 billion plan to reach ‘ambitious climate goals’

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A funding package totaling $15.5 million will go toward helping OEMs transition to electric, hybrid, and hydrogen-fueled vehicles, the Department of Energy (DOE) announced last week. However, no mention was given to supporting repair shops working to make the switch.

Part of the financing, distributed through President Joe Biden’s Investing in America agenda, includes $2 billion in grants and up to $10 billion in loans to support automotive manufacturing conversion projects. The goal is to help factories retain high-quality jobs in their communities, the DOE said.

The remaining $3.5 billion, made available through the Bipartisan Infrastructure Law, will be invested in boosting production of advanced batteries and battery materials critical to supporting clean energies. 

“President Biden is investing in the workforce and factories that made our country a global manufacturing powerhouse,” U.S. Secretary of Energy Jennifer M. Granholm said in a press release. “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.”   

Through the Domestic Conversion Grant Program, priority 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 DOE said. 

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,” it said in a press release. “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.”

It added: “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.”

The program is intended to help the government reach its “ambitious climate goals” as it pushes its own net zero emissions targets. Its cost-shared grants are available to domestic producers of efficient hybrid, plug-in electric hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles.

In April, the Environmental Protection Agency (EPA) said it was calling for new, “more stringent” emissions to accelerate production of EVs.

It proposed in a 758-page notice released last week that its latest multi-pollutant emission standard rules would be phased in for models manufactured between 2027 through 2032. If enacted, the limits on tailpipe emissions could result in BEVs accounting for up to 67% of passenger vehicles by 2032, according to one estimate in the report.

EPA administrator Michael Regan told reporters that the measures contained in the proposal reflect “the strongest ever federal pollution standards for cars and trucks.”

The DOE’s $10 billion in loans will be open to auto manufacturing conversion projects that retain high-quality jobs for their local communities.

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,” it said.

“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.”

The DOE did not respond to a Repairer Driven News query about whether it would be providing any funding for repair shops needing to transition from an internal combustion engine-focused workplace to one tailored for EVs.

Numerous automakers have already begun building EV manufacturing plants.

For example last November, Hyundai broke ground on its first U.S. electric vehicle (EV) and battery manufacturing plant in Georgia.

Commercial production at the $5.54 billion plant is still slated to begin in the first half of 2025 with an annual production capacity planned at 300,000 units, including “a diverse range of innovative Hyundai, Genesis, and Kias.”

More recently, construction began on VinFast’s factory in Chatham County, North Carolina, which is designed to reach a capacity of 150,000 vehicles per year.

Meantime, Rivian is working to build a $5 billion plant east of Atlanta that will be capable of producing up to 400,000 vehicles per year.


Featured image credit: gorodenkoff/iStock

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