An embattled auto plant in far northern Belvidere is in line for a planned $334 million grant from the federal government, part of the Biden administration’s commitment to stoking a transition to electric vehicles, the U.S. Department of Energy announced Thursday.
The grant would be a significant investment in both Illinois’ EV industry and in a plant that some thought was on a path to permanent closure early last year. The funding remains subject to negotiations between the DOE and grant applicants, according to the DOE.
Chrysler- and Jeep-maker Stellantis idled the plant in February 2023, but agreed to bring it back as part of an agreement to end a six-week strike by the UAW against the Big Three automakers. The plan to reopen the plant would potentially bring thousands of jobs back to Belvidere, a small riverside community whose economy has been fueled by the plant for decades.
In a statement, Stellantis said its selection for the potential federal grant represents “an important step in continuing to work toward finalizing a sustainable solution for the Belvidere Assembly Plant.” The company did not answer a question about the timeline for the planned rebuild of the complex.
As part of the agreement struck with the United Auto Workers last fall, Stellantis agreed to invest about $5 billion in its Belvidere operation. Contract language stated the company would launch a Belvidere parts distribution “megahub” in 2024, but that operation hasn’t opened. The site would also produce an all new midsize truck in 2027 and open an adjacent EV battery plant in 2028, according to the agreement.
The plant’s conversion to becoming a new electric vehicle complex will restore nearly 1,450 union jobs, according to the Energy Department. The department will work with the company to restart the facility in conjunction with the existing union agreement, DOE said.
A statement from the UAW indicated the union was pleased to have the DOE involved in the EV transition.
“We’re excited to be fighting alongside the Department of Energy to make sure that corporations that get federal funding honor their commitments to the workers who make the products,” the union said.
In addition to the federal money, the state is still putting together its own financial incentive package for Stellantis, employing everything from a $400 million manufacturing relocation closing fund to tax discounts for transitioning to EV production.
“The state is still in the process of finalizing the incentive details with the company and will update the public when we have developments to share,” Illinois Department of Commerce & Economic Opportunity spokesperson Emily Bolton said in an email Thursday.
Stellantis hired back 165 laid-off workers in December to work in parts distribution. In May, however, 130 of those workers were temporarily laid off, the company said Thursday.
In a statement, Gov. J.B. Pritzker said the Belvidere “facility will make our state’s clean energy economy stronger than ever before.”
The announcement follows a handful of other major investments from EV manufacturers in Illinois, including $2 billion Rivian has put into its operation in downstate Normal, according to the governor’s office.