The U.S. Department of Energy will provide $15.5 billion to help retool existing auto plants that manufacture gas-powered vehicles to help them transition to zero-emissions electrics.

Part of President Biden’s Investing in America agenda, the funding includes $2 billion in grants and as much as $10 billion in loans for conversion projects.

What You Need To Know

  • The U.S. Department of Energy will provide $15.5 billion to help automakers transition to electric vehicles

  • The DOE will provide $2 billion in grants and as much as $10 billion in loans for conversion projects that retool existing factories

  • Companies that retain collective bargaining agreements or have an existing high-quality, high-wage hourly production workforce will be prioritized for grants

  • The DOE will also provide $3.5 billion to expand domestic battery manufacturing for electric vehicles and energy storage

“Building a clean energy economy can and should provide a win‑win opportunity for auto companies and unionized workers who have anchored the American economy for decades," President Biden said in a statement accompanying the DOE announcement. "This funding from my Investing in America agenda will further that goal by creating auto manufacturing jobs here at home and helping companies avoid painful plant closings — and to retool, reboot, and rehire in the same factories and communities with high wages. This funding will help existing workers keep their jobs and have the first shot to fill new good jobs as the car industry transforms for future generations."

Companies that retain collective bargaining agreements or that have “an existing high-quality, high-wage hourly production workforce” will be prioritized for grant funding, according to a statement the White House issued Thursday.

The funding announcement comes as 150,000 United Auto Workers members enter their last two weeks of negotiations with the Detroit Three automakers on a new contract. Last week, 97% of UAW members voted to authorize a strike if the two sides are unable to make a deal.

The UAW has presented a list of 10 demands to Ford Motor Co., General Motors and Stellantis, including a 32-hour workweek, double-digit wage increases, pension benefits for all workers, limited use of temporary workers and more paid time off, but their demands have not been met.

The DOE will also make available $3.5 billion in funding to expand domestic battery manufacturing for electric vehicles and energy storage and to source battery materials and components that are currently imported from other countries.

Earlier this year, the Biden Administration revised the federal Clean Vehicle Credit program to incentivize automakers to domestically source the component materials for EV batteries and manufacture them in the U.S.

Automakers, who currently depend on China for the critical minerals needed to make EVs, said earlier this month they are unable to quickly meet the new standards.