US funding a “drop in the bucket” of what’s needed for EVs

In the US, federal support for the automotive industry is nothing new. In 2009, the Obama Administration formed the Presidential Task Force on the Auto Industry to save Chrysler (now Stellantis North America) and General Motors from bankruptcy. Concluding that these companies were too economically important to fail, the government ultimately provided more than US$80bn in low-interest loan relief.

Fast-forward to an electrifying automotive industry, and two large-scale funding programmes are available. Together, the 2021 Bipartisan Infrastructure Law and the 2022 Inflation Reduction Act (IRA) provide almost US$900bn of federal cash for the nation’s clean energy transition, including electric vehicle (EV) batteries and charging infrastructure. There are four principal mechanisms: loans from the US Department of Energy (DoE), grants (50:50 from the government and recipient), and tax credits for investment and production.

So, how effectively has government funding mustered support for the transition from internal combustion engines (ICE) to EVs, and what challenges could jeopardise the future of these programmes?