Government Announces Funding to Support EV Suppliers

Much of the conversation around electric vehicles focuses on the companies whose names will end up emblazoned on those vehicles, whether it’s Volvo, Tesla, Ford or Rivian. But these automakers aren’t the only companies that play a part in getting EVs designed, built and driven. There are countless suppliers whose bread and butter is selling to and working with automakers large and small — and companies that fit that description based in Michigan will soon have some new financial incentives available to them.

Last week, the U.S. Department of the Treasury announced that it was awarding $9.1 million to the Michigan Economic Development Corporation. This will be applied to the Michigan Auto Supplier Transition Program, which includes the goal of — as the Treasury Department phrased it — “[helping] businesses in the internal combustion engine auto supply chain transition into serving electric vehicle production or an adjacent industry.”

That’s not the only incentive announced with the intention of boosting automotive suppliers, though. The White House also announced that Monroe Capital was establishing a fund of $1 billion intended for loans to smaller automakers. Known as the Drive Forward Fund, this should have multiple applications across the industry, with the intention of shoring up the supply chains crucial to automotive production.

“The Fund will have an opportunity to provide essential financial support to small and medium-sized businesses and will help provide a consistent and reliable supply chain to the Original Equipment Manufacturers (“OEMs”), Tier 1 auto manufacturers, and other auto industry stakeholders,” Monroe Capital CEO Ted Koenig said in a statement.

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Given that the auto industry has seen all too well what supply chain issues can do to productivity and overall sales, it’s not surprising to see a measure like this being taken. But it’s also worth keeping an eye on both of these initiatives, both in terms of where the money goes and how successfully the recipients are with it.