US government allocates $12 billion for advanced vehicle manufacturing and suppliers

In an effort to promote the adoption of electric vehicles (EVs), the Biden administration has allocated $12 billion in grants and loans to assist automakers and suppliers in adapting their manufacturing facilities to produce electric and advanced vehicles, Energy Secretary Jennifer Granholm said on Thursday.

"While we transition to EVs, we want to ensure that workers can transition in place, that there is no worker, no community left behind," Granholm, a former governor of car-manufacturing state Michigan, told reporters in a phone conversation.

Accelerating grants and other subsidies to support the conversion of existing auto factories for electric vehicles might help the White House deflect criticism from automakers and the United Auto Workers (UAW) union over new environmental restrictions aimed at ushering in the electric vehicle era.

Add WION as a Preferred Source

The United Auto Workers has cautioned that a quick transformation might threaten thousands of jobs in areas such as Michigan, Ohio, Illinois, and Indiana.

However, UAW President Shawn Fain applauded the policy move on Thursday. He said "it 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."

Reuters quoted President Joe Biden as saying, "Building a clean energy economy can and should provide a win-win opportunity for auto companies and unionised workers who have anchored the American economy for decades."

Furthermore, when asked if the incentives might keep the factory operational, Granholm stated that factories constructed near communities will be important for "funding opportunities".

There will be no particular labour requirements for firms to acquire the cash, but projects with better labour conditions will have a better chance of securing the funding, according to an Energy Department official on the call.

According to Granholm, the administration would also provide $3.5 billion in support to domestic battery makers. The advanced cars will get $2 billion in subsidies from the Inflation Reduction Act, which Democrats enacted last year, and $10 billion in loans from the Energy Department's Loans Programme Office.

(Inputs from Reuters)

WATCH WION LIVE HERE