United States: aid of 15.5 billion to convert car factories to electric

Recently, the United States has multiplied the nudges and other incentives for car manufacturers. Today, the Biden administration is announcing $15.5 billion in aid to convert auto factories across the country.

This new aid is included in the plan global passed in August 2021 by the United States Congress. We are talking about l’Inflation Reduction Act (IRA). A text that caused controversy when it was released, especially in Europe. We will come back to this later.

15.5 billion for the transition

Some American automakers are struggling with electric cars because they can’t make a profit from them. The fault in particular with factories which are not optimized to build such a vehicle.

Companies in difficulty like GM or Ford may apply for assistance in the form of a financial subsidy. This aid will be used to convert existing factories so that they can produce electric vehicles as well as components.

A boost that can also reassure the employees of the various car factories in the country. Manufacturers would be more inclined to preserve current jobs with its aid, because this transition is already announcing massive layoffs in this sector.

A 400 billion plan

At the launch of this text, the Congress the United States had released, in all, the modest sum of 400 billion dollars. It is in this envelope that the Biden administration has decided to devote 15.5 billion to the conversion of American automobile factories.

With this text, the United States wants to take the lead in the revolution that is currently taking place. That of green energiesfrom decarbonization and the advent of new modes of transport.

Because yes, the 400 billion of the IRA are not intended simply to the American auto industry. This money will be used, among other things, for the production of components for the solar energiespour wind power, to give bonus of purchase for electric vehicles or even to distribute tax credits for the production of green electricity.

Upon its release, this plan had the effect to worry strongly Europe. Indeed, when the text came out, we learned that the IRA gave access to a bonus of 7 500 dollars when buying an electric car. An ecological bonus which is eligible only if the car in question is assembly in North America and/or that its battery is made from minerals mined in the United States or in a country that has signed a free trade agreement with the country of Uncle Sam.

In the weeks that followed, many market players, including European manufacturers, announced that they wanted to build factories in the United States so as not to lose a huge customer base. The European Union then judged this measure as “discriminatory” to foreign manufacturers.