U.S. Energy Secretary promises swift action on USD 1.7 billion EV conversion grants

The Department of Energy is racing the clock to complete USD 1.7 billion in grants to transition factory space for electric vehicle (EV) production, U.S. Energy Secretary Jennifer Granholm said Tuesday. "We are working as fast as we can to finalise as much as we can — to get the commitments in contract with all of those who have been selected," Granholm said at the Reuters Next conference.

A major chunk of that grant initiative, announced in July, is for the major automakers. Michigan’s Lansing Grand River Assembly Plant is slated to be converted to EV production and General Motors will receive USD 500 million to do so. In addition, the parent of Chrysler — Stellantis — will receive a total of USD 334.8 million to convert its slow shuttered Belvidere Assembly Plant in Belvidere into an EV factory, and will receive USD 250 million to use its Indiana Transmission Plant in Kokomo to produce EV components for its other factories.

Stellantis and the United Auto Workers have been colliding over delays in the Belvidere investment, and Granholm's remarks come as tensions between the automaker and the trade union continue. In response to questions about the delays, Granholm said of the complexity on the situation: 'there's a whole range of considerations going on.'

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The stakes in UAW’s election are also heating up as UAW President Shawn Fain threatened tens of thousands of U.S. jobs could disappear if the U.S. ends up with another Republican president like Donald Trump threatening to repeal EV investments. They're pointing to Trump's running mate, Senator JD Vance for lack of commitment to the GM grant, warning about the EV future of funding. Both GM shares rose 9.7% and Stellantis shares gained 0.5% on Tuesday.

Granholm reiterated the Biden administration's commitment to ensuring the U.S. remains competitive in the global EV market, stating, "America's automakers are in this amazing race to dominate this industry." She emphasised that the government is equipped to support this transition with robust strategies and investments, positioning the U.S. to lead in EV production.