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DOE Announces Availability of up to $10 Billion in Loan Authority for Automotive Manufacturing Conversion Projects to Retain Quality Auto-Sector Jobs [1]

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Date: 2023-09 

The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) today is announcing that it is accepting and encouraging applications under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program for automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host manufacturing facilities—and announcing that it is planning to provide up to $10 billion in loans for this purpose.

In addition to other ATVM evaluation criteria, Automotive Manufacturing Conversion Project applications will be reviewed considering criteria to ensure that projects minimize risks to project success, including by implementing effective strategies to retain and attract a skilled workforce and avoid labor strife. Examples include retaining existing workers, providing high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete, in the case of facility replacement projects.

In the event that an applicant seeks LPO financing for a project that converts or directly replaces an existing factory that has high-quality jobs, LPO will also assess the projected economic impacts of the facility conversion relative to the existing facility, including factors such as contribution to the local economy, employment history, anticipated employment, and duration of its existence. For these projects, LPO will assess the degree to which the proposed project is likely to preserve high-quality jobs, prioritizing applicants that currently pay top quartile wages in their industry as reported by the U.S. Bureau of Labor Statistics, as well as commensurate non-wage compensation benefits, as applicable. LPO will also consider the degree to which the proposed project, or group of projects, are in communities with a 20+ year history of producing vehicles or supplying parts for vehicles.

Through ATVM, LPO supports manufacturing facilities for eligible vehicles or qualifying components, including projects to build new facilities; reequip, modernize, or expand existing facilities; and/or for engineering integration performed in the United States related to the manufacturing of eligible vehicles or components.

Today’s announcement, which leverages existing loan authority made previously available by Congress through annual appropriations and the Inflation Reduction Act, supports President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing of technologies that are critical to reaching the clean energy and transportation future. Expanding domestic production of electric vehicles (EV) and the EV supply chain is critical to reaching the Biden-Harris Administration’s goals to have EVs represent at least 50% of all new car sales in the U.S. by 2030, reach net-zero electricity by 2035 and a net-zero economy by 2050.

DOE’s focus on supporting ATVM projects that include existing eligible manufacturing facilities supports the Biden-Harris Administration’s commitment to retaining and creating good-paying jobs in communities that have historically played an outsized role in supporting American automotive and component manufacturing, and whose manufacturers and workers will continue to be front and center in the transformation of the U.S. automotive sector in supporting the EV supply chain.

Applications solicited under today’s announcement must be consistent with the existing ATVM authorities as provided by Congress and will be subject to existing ATVM regulations. It is the policy of LPO to interpret the ATVM Program broadly to encourage applications from a range of eligible potential projects. Existing statutory authority for ATVM requires LPO to ensure projects pay laborers or mechanics at least at prevailing wages and abide by strong labor standards (42 U.S.C.§17013(d)(2)). The Bipartisan Infrastructure Law requires DOE to report on ongoing compliance with these factors, as well as on the direct and indirect jobs retained, restored, or created by financed projects (42 U.S.C.§17013(m)). In addition, ATVM Program’s existing regulations establish evaluation criteria that include consideration of a project’s economic development impact and geographic location, as well as whether an applicant has an existing or idle facility, all of which may be considered in DOE’s decision to issue a loan.

Interested applicants who wish to apply as an Automotive Manufacturing Conversion Project will be evaluated and scored based on the criteria above, as well as other ATVM evaluation criteria. Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying by contacting atvmloan@hq.doe.gov to request a consultation with an LPO staff member.

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[1] Url: https://www.energy.gov/lpo/articles/doe-announces-availability-10-billion-loan-authority-automotive-manufacturing

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