The Department of Energy froze the grants as part of a review of Biden’s green energy spending last year
The Trump Department of Energy is restructuring $1.7 billion in Biden-era grants that were designed to coax major automakers to convert their factories into electric vehicle plants, the Washington Free Beacon has learned. The funding will now be used to increase the production of hybrid vehicles and other advanced car technology.
The grants include $584.8 million given to Stellantis, $500 million given to General Motors, $285 million given to Mercedes-Benz, and $208 million given to Volvo for various EV and electric truck projects, according to internal DOE documents. The DOE froze the grants last year as part of a sweeping review of green energy spending, but in recent weeks initiated negotiations with the car companies to discuss modifying their grants. Those negotiations remain ongoing.
“One of the major issues that we had with the Biden administration’s selections were that they didn’t take into account market forces,” a senior DOE official involved in the review told the Free Beacon, noting that EVs are no longer as “cost-useful” as they were when the companies first applied for the funding three years ago.
“There are many [car companies] who came back and said, ‘our plant was going to do just EVs. That’s no longer feasible.’ There are hybrid options that were presented,” the official continued. “The opportunity to create optionality was huge for this.”
In addition to support for hybrid development, the official said the grants would also enable the manufacturing of related advanced car technology like regenerative braking systems, which convert kinetic energy into electricity in EVs and hybrids.
The DOE’s actions reflect President Donald Trump’s agenda to boost car manufacturing in the United States while increasing consumer choice in car buying. They also represent the latest rollback of the Biden administration’s green agenda, which involved phasing out production of gas-powered autos. Then-White House adviser John Podesta, for example, said the DOE auto grants would help tackle “the existential threat of climate change.”
Since taking office, Trump has moved swiftly to slash Biden-era regulations that were designed to force Americans to buy EVs and eliminate generous tax incentives for EV buyers. Those actions have contributed to the rapid decrease in EV sales. At the same time, hybrid sales have far overtaken EV sales, according to the Energy Information Administration, and automakers have abandoned plans to transition their fleets to EVs.
In a statement, a spokeswoman for Stellantis said the company was grateful the DOE is moving forward with the grants, which would be used to expand operations at an assembly plant in Illinois and a transmission plant in Indiana. “These projects are central to our continuing strategy of expanding our U.S. manufacturing footprint, which will bring jobs and investment to those communities,” she said.
“We very much appreciate the grant, which will help the company and the more than 7,000 workers in these three U.S. plants be more competitive,” a Volvo spokesman added. “We have not yet received any funding from the grant, and are in the process of working with the DOE on project modifications to ensure alignment with DOE priorities.”
The Volvo grant will be used to increase truck manufacturing in Pennsylvania, Virginia, and Maryland.
A General Motors spokeswoman said the company is working closely with the DOE on next steps, but declined to provide further details. Mercedes-Benz declined to comment.
The grants are not the only ones the DOE has brought back to life following its review of green energy spending. Out of the 2,200 grants it reviewed, the agency has restored 1,950 worth nearly $24 billion, according to the documents reviewed by the Free Beacon. The auto grants are some of the single-largest grants that the DOE restored.
“We’ve had hundreds of dialogues with many applicants back-and-forth,” Energy Secretary Chris Wright said during a House hearing last month in reference to the restored funding. “Many projects were readjusted to better align. The applicants themselves said, ‘we only put that in because we were told that if we did that, we would get money.'”
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