Small and midsize auto parts makers will be eligible for more than $100 million in federal grants to expand or retool their facilities to produce parts for electric vehicles, Vice President Kamala Harris announced Monday.

What You Need To Know

  • The Department of Energy will provide $100 million in grants for small and medium-sized auto parts makers as they transition to support eletric vehicles

  • $50 million will go to suppliers to convert their manufacturing operations to produce EV parts

  • $50 million will help auto suppliers improve their facilites' energy efficiency, cybersecurity and productivity or reduce greenhouse gas emissions

  • On Monday, the DOE started accepting applications for a new fellowship program that matches employers with workers

The Department of Energy will provide $50 million for Automotive Conversion Grants that allow small and midsize auto parts suppliers to convert their manufacturing operations to support electric vehicles instead of those that run on gas. As part of the Bipartisan Infrastructure Law, the department will provide another $50 million in Implementation Grants to help auto suppliers improve their facilities’ energy efficiency, cybersecurity and productivity or reduce greenhouse gas emissions.

“The strength of America’s economy is based on the strength of America’s supply chains. We all learned that in the pandemic if it weren’t clear before,“ Vice President Harris said in Detroit on the second stop of her Nationwide Economic Opportunity Tour.

“This investment will help to keep our auto supply chains here in America which strengthens America’s economy overall and keeps those jobs here in Detroit.”

Harris said the Energy Department will also partner with the Small Business Administration on a new program that matches government-backed loans with private capital investments to lower borrowing costs for small and medium-sized auto parts manufacturers. That program includes the establishment of a new pilot program to offer lines of credit to parts makers and distributors.

“For companies, there’s no shortage of a desire for talent,” Energy Secretary Jennifer M. Granholm said at the event, where she announced a first-of-its-kind fellowship called the Readiness Accelerator for Major Programs, or RAMP.

The program is designed to match companies that have received Energy Department grants to train, apprentice and hire local workers.

The Vehicle Suppliers Assn. known as MEMA applauded Monday’s announcement, saying it will strengthen the domestic auto industry and ensure its competitiveness in clean vehicles moving forward. There are about 1,100 auto parts manufacturing businesses in the United States, according to IBISWorld, 1,000 of which are represented by MEMA.

The assn. has been collaborating wih the White House on strategies to support auto parts suppliers as they transition away from gas-powered vehicles. In March, the Biden administration announced new tailpipe emissions rules that would require 56% of new vehicles sold in the U.S. be electric and 16% be hybrids by 2032.  

“This significant investment and comprehensive set of actions announced by Vice President Harris will undoubtedly have a meaningful impact for the sector,” MEMA President and CEO Bill Long said in a statement. “This is a clear step in the right direction for our members, empowering them to thrive in the evolving vehicle ecosystem.”