Biden administration to award nearly $1.1 billion to Stellantis, GM for EV production

Blue Bird

11/07/2024 10:00

By David Shepardson
       WASHINGTON, July 11 (Reuters) - The Biden administration
plans to award General Motors  GM.N  and Chrysler-parent
Stellantis nearly $1.1 billion in grants to convert existing
plants to build electric vehicles and components, it said on
Thursday.
    The Department of Energy (DOE) announced $1.7 billion in
planned grants to help fund the conversion of 11 "at risk"
plants in eight states to enable the production of 1 million EVs
annually, help retain 15,000 existing jobs, and create 3,000 new
positions. 
    Energy Secretary Jennifer Granholm told reporters the awards
were a "hallmark of the Biden administration's industrial
strategy" and would "modernize historical auto manufacturing
facilities."
    She said it had become clear more than a decade ago that
automakers, to embrace the future, "needed a federal partner
especially to compete with other countries who were subsidizing
their auto industries and that's what this massive investment is
all about."
    The awards are for plants in Michigan, Ohio, Pennsylvania,
Georgia, Illinois, Indiana, Maryland, and Virginia — several of
which are crucial in the November presidential election.
    President Joe Biden has prodded U.S. automakers to assemble
a rising number of EVs, introduced new tax incentives and funded
 EV charging stations. Regulators have also issued stricter
emissions rules that will boost EV sales.
    Donald Trump has harshly criticized Biden's EV policies and
vowed to reverse them if he takes office. The White House is
courting union workers in key battleground states and seeking to
reassure autoworkers that EVs will not cost jobs.
    General Motors will receive $500 million to convert its
Lansing Grand River Assembly Plant in Michigan to EVs at an
unspecified future date. GM said it will make its own
unspecified investment to produce EVs in Lansing at a future
date but said the plant will continue to produce the Cadillac
CT4 and CT5.
    In October, Stellantis  STLAM.MI  agreed to build a new $3.2
billion battery plant and invest $1.5 billion in a new mid-size
truck factory in Belvidere, Illinois under a new union contract
— a project Biden has touted.
    The DOE plans to award Stellantis $334.8 million to convert
the shuttered Belvidere Assembly plant to build EVs and $250
million to convert its Indiana Transmission Plant in Kokomo to
produce EV components. Stellantis said the expected awards were
"an important step in continuing to expand our electrified
vehicle offerings."
    Hyundai Mobis  005380.KS , which operates a Stellantis
supplier in Ohio, will receive $32 million to produce plug-in
hybrid components and battery packs.
    Other awards include $89 million for Harley-Davidson  HOG.N 
to expand its York, Pennsylvania plant for EV motorcycle
manufacturing; $80 million for Blue Bird  BLBD.O  to convert a
former Georgia plant to build electric school buses; and $75
million to engine company Cummins  CMI.N  to convert part of an
existing Indiana plant to make zero-emission components and
electric powertrain systems.
    The DOE also plans $208 million for the Volvo Group
 VOLVb.ST  to upgrade plants in Maryland, Virginia and
Pennsylvania to increase EV production capacity and $157 million
for ZF North America  ZFF.UL  to convert part of its Marysville,
Michigan plant for EV component production.
    The DOE must still complete negotiations with companies on
milestones and other requirements and complete environmental
reviews before the awards are finalized.

 (Reporting by David Shepardson; Editing by Janane Venkatraman
)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))