Over $1 billion in aid allocated for auto suppliers making the EV transition

The White House announced on Sept. 23 that over $1 billion will be allocated to support small and underserved auto manufacturers as they transition to production for the electric vehicle market.

The investments, with what the White House called “an emphasis on historic auto communities in Michigan,” will fund two new initiatives: one to help auto manufacturers obtain support services and a second that will help companies grow their business at a lower cost.

The federal government has created a variety of programs and funding opportunities to spur electric vehicle and battery production as part of the Biden-Harris administration’s clean energy agenda. The recent announcement comes a little over four months after Vice President Kamala Harris visited Detroit to announce that small- and medium-sized auto manufacturers in Michigan would be among those receiving federal aid to retool or expand their facilities.

“I believe in an economy where everyone has a chance to compete and a chance to succeed. Investing in the ambitions and aspirations of our people is the best way to grow the American economy and the middle class,” Harris said in a statement. “Yet for far too long, we have seen lack of investment in communities across America and profound obstacles to economic opportunity—including in communities with historic manufacturing expertise such as Detroit.”

The newly launched Michigan Auto Supplier Program will provide underserved businesses with financial, legal, accounting and other support services that will help them shift from making traditional vehicles to becoming part of the electric vehicle supply chain. The U.S. Department of the Treasury allocated $9.1 million for the program, and the Michigan Economic Development Corporation will oversee its implementation.

Additionally, Monroe Capital, a Chicago-based investment firm, has committed to raise up to $1 billion for a fund that will provide small- and medium-sized auto manufacturers with access to capital at a cheaper rate. The “Drive Forward” fund, supported by the Small Business Administration’s Small Business Investment Company program, will focus on companies that need the additional capital to increase their manufacturing capacity.

In its announcement, the White House summarized the record investments in industry and infrastructure made under the Biden-Harris Administration, including $28 billion for clean energy and manufacturing in Michigan.

Harris, who has been endorsed by the United Auto Workers and by Joint Council No. 43 of the International Brotherhood of Teamsters, which represents 10 union locals across the state of Michigan, in the 2024 presidential race, said in the White House announcement: “Earlier this year, I was proud to announce new support for small- and medium-sized auto suppliers in Detroit. Today’s announcements build on those investments by making sure our auto supply chains stay here in America, strengthening our economy overall by investing in historically underserved communities, and keeping more auto jobs in Detroit.”