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On the 11th of July, the Biden-Harris Administration announced USD1.7 billion in funding to convert 11 vehicle assembly and production plants supporting domestic EV production. The plants, located across eight states, are either closed or at risk of closure. This funding aims to ensure the US’ manufacturing automotive industry remains competitive on an increasingly challenging world stage.
Funding for production across the US
Awardees of the funding include GM, Stellantis, Volvo, Blue Bird, Harley Davidson, Cummins, and ZF, with facilities spread across Michigan, Ohio, Pennsylvania, Georgia, Illinois, Indiana, Maryland, and Virginia.
GM and Stellantis are the largest awardees, set to receive USD500 million and USD580 million, respectively. For GM it will fund the conversion of its facility in Lancing, Michigan for EV production. Meanwhile Stellantis will convert two facilities one in Belvidere, Illinois for EV production, the other in Kokomo, Indiana for the production of electric drivetrains.
Volvo Group will also receive USD208 million for the conversion of three of its heavy-duty truck facilities to produce fuel cell and electric trucks under the Volvo and Mack Brands.
Supply chain funding
The inclusion of both ZF and Cummins show that the US government is also aiming to support the EV production supply chain. ZF will receive USD158 million to transform its Marysville, Michigan plant from producing internal combustion engine components to EV parts. Cummins will receive USD75 million to convert its Columbus, Indiana facility as part of a USD150 million project.
Rho Motion’s Evaluation, the state of play in the US EV manufacturing industry
Uptake of EVs in the US has been slower compared to other major economies in the world. However, as the US aims to compete against China in the EV space, it is investing in its domestic production capabilities.
There is an upcoming wave of dedicated EV production facilities in the US through to 2028, from the likes Hyundai, VinFast, Ford, Nissan, Scout and Rivian. That considered some of these, most notably Ford and Nissan, have recently delayed their plants mainly due to a slow down of EV adoption in the US.
Under the IRA, a number of other countries are emerging as hubs for production of US bound EVs, most notably Mexico. GM has recently started producing four models on the Ultium platform there, while one of the US’ most popular EVs, Ford’s Mach-E, is made in Mexico.
The US has to find the balance of supporting its domestic EV production industry whilst also allowing the import of EVs produced from IRA friendly countries.
More information
We recently released the Q2 edition of the Rho Motion EV Production Outlook, this report tracks EV manufacturing across 30+ major automotive producing nations by BEV and PHEV out to 2030, to find out more see here.
For more information on how our research can support you, get in touch.
Image Credit: Adobe Stock
Sources: energy.gov, energy.gov
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