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Tina Casey headshot

Low Profile, High Impact: New Life for At-Risk Auto Plants

The U.S. Department of Energy just announced $1.7 billion in grants for 11 projects transforming derelict automotive plants into facilities capable of taking part in the electric vehicle supply chain.
By Tina Casey
An EV charging.

(Image: Rathaphon Nanthapreecha/Pexels)

The partisan political gap on climate action is wider than ever, but the Joe Biden administration is still forging ahead with support for private-sector stakeholders in the zero-emission, electric vehicle (EV) field. In the latest development, the U.S. Department of Energy tapped 11 automotive projects, for a total of $1.7 billion in matching grants, aimed at transforming derelict and aging manufacturing plants into modernized facilities focused on the EV supply chain.

Transforming old factories into new

The grants are administered by the Energy Department’s Office of Manufacturing and Energy Supply Chains through the new Domestic Manufacturing Auto Conversion Grants program. Funded by the 2022 Inflation Reduction Act, the program provides matching funds of up to 50 percent to support the retooling of existing manufacturing facilities and rehire auto workers.

In terms of size, the $1.7 billion in federal assistance pales beside the impact of other Biden administration initiatives aimed at stimulating activity in the EV industry. To date, the administration estimates that the Investing in America agenda accounts for $177 billion in private sector investment in EVs, including EV batteries.

Nevertheless, the grant program reflects a holistic, long-term approach to fostering a healthy U.S. EV manufacturing industry. The final award details are still under negotiation, but the selection of awardees indicates that the Biden administration is casting a wide net. The Energy Department lists parts for electric motorcycles and school buses, hybrid powertrains, heavy-duty commercial truck batteries, and electric SUVs among the nine awardees.

Signs of life for EV sales, too

The new grant program also presents a counterpoint to concerns over a slowdown in electric vehicle sales growth. Those concerns sparked last fall when General Motors and Ford indicated that EV sales were not rising as quickly as anticipated.

Though concerns over the pace of growth remain, the statistics do not show a decline in EV sales among U.S. automakers overall. Electric and hybrid-electric sales have actually increased and hit a new record in 2024, with the notable exception of Tesla, according to Cox Automotive. Tesla continues to struggle with declining sales, and some analysts surmise that GM, Ford, and other manufacturers are benefitting from new EV buyers who are turned off by the political inclinations of Tesla CEO Elon Musk.

Regardless of the current pace of growth in the EV market, GM is among the automakers still committed to vehicle electrification. The company won a matching grant of $500 million from the new supply chain program to convert its aging Lansing Grand River Assembly Plant in Michigan. GM already anticipates that the retooled facility will be eligible for future EV support programs. 

The company also notes that it made significant investments in the domestic battery supply chain, with the aim of “accelerating commercialization of advanced, affordable EVs.” That outlook represents a sea change from GM’s 1990’s reputation as the owner of the oversized, gas-guzzling Hummer brand.

Another iconic U.S. firm with deep roots in the 20th century is Harley-Davidson. The motorcycle company is also switching gears with support from the new grant program. Harley plans to deploy a matching grant of $89 million to expand an existing facility in Pennsylvania for electric motorcycles in partnership with its LiveWire affiliate. The conversion will involve re-training the company’s union workforce of more than 1,300 employees and hiring an additional 125 workers.

“With this grant, Harley-Davidson can invest in the existing York facility to accelerate placed-in-service dates, utilize and expand its experienced workforce and guarantee supply chain continuity — all of which expedites the U.S. transition toward EVs by creating more affordable, faster-charging EV options for customers,” according to the Office of Manufacturing and Energy Supply Chains.

Behind the supply chain scenes in the EV transition

The list of supply chain grant awardees also includes the familiar names of Volvo and Fiat-Chrysler. It demonstrates that the EV supply chain is growing long, deep roots that will be difficult, if not impossible, to untangle.

The Hyundai Mobis subsidiary American Auto Parts, for example, received a grant of $65 million to convert an existing plant in Ohio for manufacturing plug-in hybrid electric vehicle chassis, aimed at the manufacture of a light-duty truck. Part of the grant will also go to construct a new battery plant in Ohio for plug-in hybrid SUVs, light trucks and minivans.

Two other behind-the-scenes global automotive stakeholders, Cummins and ZF North America, are receiving grants to transform factories in Indiana and Maryland to produce EV components.

In addition to support from the Biden administration for decarbonizing street-legal vehicles, the electrification trend is gaining momentum in off-road industries, including port and logistics facilities, construction equipment and agriculture.

If elections have consequences — and they do — then U.S. investors, executives and workers who earned the benefits of climate action policies promoted by the Biden administration will have a clear choice on Election Day. Whether they continue to benefit in the future remains to be seen. 

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

Read more stories by Tina Casey