The federal government has pumped billions into EV incentives and charging infrastructure initiatives, and now, it’s automotive suppliers’ turn at the bank. The Biden administration recently announced more than $100 million in funding to help smaller suppliers adapt to the changing automotive world.
Around half of that money comes from the Department of Energy to help internal combustion engine suppliers retool to make EV parts. Another $50 million provides grants of up to $300,000 for the companies to make their factories greener and improve cybersecurity.
Suppliers have been in a tight spot for years as materials and labor costs have skyrocketed. Additionally, while automakers’ production volume has grown since the barren days of the COVID-19 pandemic, they aren’t making cars in the same numbers they did before, reducing revenues for the companies that supply them. Many suppliers also felt the squeeze during last year’s UAW strike, which shut down some of the factories that were making popular vehicle models.
As part of the program, the DOE will also work with the Small Business Administration to provide business coaching and help companies reduce risk across their operations. The SBA will create a pilot program to offer credit lines to small businesses, and the Biden administration will use an existing program to help small suppliers dip into millions in private equity dollars. Those efforts are in addition to a separate fund that aims to assist with workforce and technology training to better equip manufacturing workers as factory lines increasingly shift to building EVs.
[Image: Bok David via Shutterstock]
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