The United States is preparing to assist its auto suppliers in adapting to the transition from gasoline-powered vehicles to electric vehicles. With this goal, the White House has announced the creation of a fund worth up to one billion dollars to help small and medium-sized auto parts suppliers access easier financing for refinancing and business expansion.
For this purpose, the investment company Monroe Capital has been selected to launch the “Drive Forward Fund LP,” whose role is to provide financial support to businesses supplying key components, such as powertrains, body structures, transmissions, chassis, interiors, and electric components, as well as complementary software-as-a-service (SaaS) providers and other auto technologies and business services in the industry, according to the statement.
The fund will also assess growth opportunities for investing in innovative companies involved in the production of battery components and subcomponents, as well as material recycling.
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The US Department of the Treasury announced a grant of 9.1 million dollars to launch the Automotive Supplier Transition Program in Michigan, which is designed to help smaller businesses acquire financing for manufacturing electric vehicle components.
John Bozzella, president and CEO of the Alliance for Automotive Innovation, said that the transition to the electrification of the automotive industry in the United States requires a modern auto supply chain that keeps the country competitive and ensures economic and national security.
“Automakers are investing billions in this transition and producing electrified vehicles across all brands and models, but it’s important to remember that the auto supply chain is made up of hundreds of companies—many of which are small and medium-sized businesses,” Bozzella said.
In July, the Department of Energy announced plans to award GM and Stellantis nearly 1.1 billion dollars in grants to convert existing factories to electric vehicle and component production, while last week, a three-billion-dollar grant for the battery manufacturing sector was announced.
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