GM And Stellantis Get $1 Billion From Feds For EVs

The Energy Department said its Domestic Manufacturing Auto Conversion Grants are funded through the Inflation Reduction Act and support production of EVs, hybrids, plug-in hybrids and hydrogen fuel cell vehicles. The program is designed to help companies make the switch from internal combustion engines to producing EVs and related components.

The grants cover facilities in Michigan, Illinois, Indiana, Ohio, Pennsylvania, Georgia, Maryland and Virginia. Other recipients include an American Autoparts Inc. chassis assembly operation in Ohio and Volvo Group plants in Pennsylvania, Virginia and Maryland that build medium- and heavy-duty trucks. Volvo Group is not affiliated with Volvo Cars.

“There is nothing harder to a manufacturing community than to lose jobs to foreign competition and a changing industry,” U.S. Energy Secretary Jennifer Granholm, a former Michigan governor, said in a statement. “Even as our competitors invest heavily in electric vehicles, these grants ensure that our automotive industry stays competitive — and does it in the communities and with the workforce that have supported the auto industry for generations.”

The largest single grant is going to GM’s Lansing Grand River plant. It will be among several GM plants that can build EVs and components, including Factory Zero in Detroit, Orion Assembly in Michigan, Spring Hill Manufacturing in Tennessee, Fairfax Assembly in Kansas and Toledo Propulsion Systems in Ohio. GM committed to investing $1.25 billion at the Lansing plant on future EV production last fall as part of the automaker’s new contract with the UAW.

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“GM’s investment and this Department of Energy grant underscore our commitment to U.S. leadership in manufacturing and innovation, making sure we’re competitive at home and abroad,” said Camilo Ballesty, GM’s vice president of North America manufacturing and labor relations. “Our Lansing Grand River team produces incredible vehicles for our customers, and we’re proud to bring our commitment to performance and quality into our EV future.”

Stellantis shuttered its Belvidere plant, which built the Jeep Cherokee, in February 2023. In its new agreement with the UAW, the automaker agreed to reopen the plant for midsize pickup production starting in 2027, along with a nearby $100 million Mopar parts hub and a $3.2 billion joint-venture battery plant.

A price war that has been running for almost two years has pressured margins at some Chinese EV makers, and could continue as dominate players like BYD Co. and Tesla Inc. seek to consolidate their dominant positions.

“As long as big players like BYD still have a gross margin, there’s always room for a further price war,” Stephen Dyer, Alixpartners’s Shanghai-based managing director, said at a briefing Wednesday.

While the average sale price of cars in China fell 13.4% in the past year, the average margin of automakers rose to 7.8% in 2023 from 6.3% the previous year, according to Alixpartners. Manufacturers have cut costs by squeezing suppliers and moving fast to bring new models to market.

By the end of 2030, Chinese automakers are set to held 33% of the global auto market, and 45% of new-energy vehicle sales, Alixpartners said. However, the consultancy downgraded its forecast for China’s share of the European auto market to 12% from from 15%, given the European Union’s imposition of additional provisional tariffs.

Taking risks and moving fast — meeting minimum safety and regulatory requirements first before making upgrades (most of which can be done with software updates after delivery).

Separating the development of hardware and software, set up independent NEV brands and securing financing and local government support.

The national level investment in battery and material technologies; involving suppliers early, and in some cases, taking advantage of vertical integration.

Improving efficiency by organizational structure and an overtime working culture. While workers at legacy automakers do a maximum of 20 hours overtime a month, staff at Chinese NEV makers can do as much as 140 hours overtime a month.

Oakland-based Judge Michael Markman of Alameda Superior Court said at a hearing on Tuesday that he would hold a hearing in October 2025 on whether to certify the case as a class action, later than the plaintiff’s lawyers had suggested.

A Tesla customer sued the company last year on behalf of drivers in 11 states, claiming it inflated insurance premiums based on “false” crash warnings instead of actual driving behavior.

The lawsuit said Tesla, which sells insurance for its vehicles directly to customers, violated California’s sweeping unfair competition law, in addition to breaking contracts with drivers.

A lawyer for Tesla said at Tuesday’s hearing that it was taking “a lot longer” than expected to gather information to defend against the case because of the number of states involved and the departure of a Tesla employee who had been working with its outside attorneys.

“Just last week we lost our main contact at the company,” said attorney Min Kang, representing Tesla.

Kang did not name the official or the person’s role at Tesla, but she said the company was in the process of hiring a replacement. “So that is complicating things,” she said.

Tesla offers insurance that relies on real-time driving behavior. The company says premiums are based on factors including a “safety score,” which includes vehicle data related to hard-braking, “aggressive” turning and “forward collision warning alerts.”

Many Tesla drivers have “reported suffering sporadic and random Forward Collision Warnings when there is no danger in sight,” which affects their safety score and drives up their premiums, the complaint said.

A Reuters special report published last year and that was part of a Pulitzer-prize winning series detailed how complaints about Tesla’s insurance unit had drawn scrutiny from state regulators and plaintiffs’ lawyers.

Since then, the monitor and the union have clashed over how much access the monitor should have to union documents, and the pace at which the union has produced them. In Monday’s filing, the monitor, Neil Barofsky, sought an order granting him extensive access.

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The monitor was appointed as part of a 2021 consent decree that ended a federal corruption case against the union. It concerned 11 top officials who were convicted of felonies, including two former U.A.W. presidents.

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Mr. Barofsky’s investigation initially looked into accusations involving Mr. Fain and the union’s second-ranking official, its secretary-treasurer Margaret Mock.

A union official accused Ms. Mock of denying legitimate requests for money by members of the union’s board. After the board voted to rein in her authority, Ms. Mock accused Mr. Fain of retaliating for her refusal to authorize inappropriate spending.

Mr. Barofsky’s investigation has since expanded to include accusations that a regional director embezzled union funds, and the accusation involving Mr. Fain and his partner.

According to Monday’s filing, Mr. Fain stripped a vice president of his authority to oversee the union’s Stellantis department in late May, citing “dereliction of duty.” After that, the monitor received complaints from other union officials that Mr. Fain had taken the action in retaliation for the vice president’s refusal to go along with actions that would have benefited Mr. Fain’s partner and her sister.

Thereafter, Mr. Barofsky proposed that the union expedite the process by searching its records for key terms and handing over any document that contained them. The union argued that the terms would require it to hand over more than 200,000 documents. The monitor then revised the terms in such a way that they would produce about 116,000 documents, of which he said the union has produced only about 70,000.

In a filing of its own last week, the union argued that Mr. Barofksy had made “a massively broad electronic search request that necessarily encompasses a significant amount of documents that are irrelevant to the investigation.”

The union added that the search terms pulled in “the most highly sensitive privileged and collective bargaining strategy documents that the union holds” even when they had no bearing on the accusations.