The funds, from the Department of Energy, are available as loans to support the transition of manufacturing plants to build EVs or hybrid vehicles. This is likely aimed at supporting both auto unions, to help persuade automakers to keep plant capacity on US soil, and the administration’s strategic goals of driving more green manufacturing investment.
The transition to EVs is exciting but hugely expensive. Like any change on this scale, government policy plays a crucial role in facilitating (or frustrating) that transition. Investments like this seem to me to be relatively low-risk and potentially quite beneficial. Access to cheap capital drives investment decisions and accelerates timelines. And for the broader economy, capital infusions on this scale have tremendous positive impacts to local and regional economies, giving the manufacturing hubs in the midwest and south the kind of spikes that will keep growth assured for the coming years.
With China close to a decade ahead of the US with their new energy policies and EV manufacturing capabilities, these kinds of policies are crucial to accelerate America’s path to claiming a slice of the global EV market. That is to say, without policies like this (and others via the IRA), we’d be almost assured of missing out on the coming EV manufacturing boom.