Biden Administration Awards Stellantis $584.8 Million For EV Production
Some Stellantis Suppliers Also Awarded Millions For EV Components...
The Biden administration is taking significant steps to boost electric vehicle (EV) production in the United States. As part of this effort, the Department of Energy (DOE) announced plans to award nearly $1.1 billion in grants to automakers General Motors (GM) and Stellantis. Stellantis, the parent company of brands like Chrysler, Dodge, Jeep®, and Ram, will receive substantial funds to convert existing plants for EV production.
Impact on Jobs and the Economy –
The DOE’s planned grants aim to help fund the conversion of 11 “at risk” plants across eight states. These conversions are expected to enable the production of 1 million EVs annually, retain 15,000 existing jobs, and create 3,000 new positions. This initiative is a key part of the Biden administration’s strategy to modernize historical auto manufacturing facilities and ensure the U.S. remains competitive in the global automotive market.
Stellantis’ Plan for EV Production –
Stellantis is set to receive a total of $584.8 million to modernize its facilities for EV production. The company will use $334.8 million to convert its shuttered Belvidere Assembly Plant in Illinois. This conversion will enable the plant to build EVs like a new mid-sized electric pickup, breathing new life into the facility and creating new regional jobs.
Additionally, Stellantis will receive $250 million to revamp its Indiana Transmission Plant in Kokomo, Indiana. This investment will shift the plant’s focus to producing EV components, an essential step in expanding Stellantis’ EV offerings.
Supplier Investments: Hyundai Mobis, Cummins, and ZF North America –
Stellantis’ move toward increased EV production also involves significant investments from its suppliers. Hyundai Mobis, a key supplier, will receive $32 million to produce plug-in hybrid (PHEV) components and battery packs in Ohio. This investment is crucial for supporting Stellantis’ hybrid vehicle initiatives.
Cummins, a well-known engine supplier for Ram, is set to receive $75 million and will match it for a total of $150 million to convert part of its existing plant in Indiana. This conversion will allow Cummins to produce battery packs, powertrain systems, and other BEV components for Accelera™ by Cummins, the company’s zero-emissions business segment. Cummins anticipates adding approximately 250 full-time jobs to support this additional manufacturing capacity, with opportunities for the plant’s existing workforce to transition to many of these positions over time.
ZF North America, another vital supplier for Stellantis, will benefit from $157 million to convert part of its plant in Marysville, Michigan. This investment will enable ZF North America to produce EV components, further supporting Stellantis’ transition to electric mobility.
Recent Layoffs and Cost-Cutting Measures –
Despite these promising investments, Stellantis has recently undertaken significant cost-cutting measures. The company wants to cut $200 million company-wide in the second half of 2024. Earlier this year, Stellantis laid off 2% of its North American workforce, moving engineering and software jobs to countries such as India, Brazil, and Morocco. The automaker has also cut temporary jobs at its auto plants, including laying off 199 employees at the Sterling Heights Assembly Plant, which builds the company’s best-selling vehicle, the Ram 1500.
Political and Economic Context –
The initiative has faced criticism from former President Donald Trump, who has vowed to reverse Biden’s EV policies if he takes office again. The administration’s efforts are also reassuring autoworkers, particularly in key battleground states, that the transition to EVs will not result in significant job losses.
