The United States Department of Energy has announced $15 billion in new funding for automakers in order to help them transition towards electric vehicles.
What’s happening:
- $15 billion will be provided to automakers and manufacturers to help support them in transitioning to electric vehicles
- Much of the funding will go towards helping existing automakers retrofit and upgrade their facilities to be able to produce electric vehicles
- $2 billion will be made available as grants and $10 billion will be available as loans
Why it matters:
- The journey to net zero and clean energy has been highly important to the United States, with record breaking progress being made in building out infrastructure for the energy transition over the last year
- Electric vehicle adoption is a critical component of the energy transition
- Legacy automakers are inevitably needing to embrace the shift towards electric vehicles and this will provide a source of non dilutive capital to do so
- Accelerating the United States transition to electric vehicles also spurs innovation in startups working on clean energy, from battery technology to energy storage
Going deeper:
- $3.5 billion will be directed towards increasing American based production of battery materials and battery manufacturing
- Battery materials startups have seen large flows of venture capital of late, so new government funding is likely to only accelerate the rate of innovation
- Startups working in renewable power will also likely to be able to benefit, as the new bill signals an intent to support clean grid-scale storage projects
