- Investment firm Monroe Capital plans to launch a $1 billion fund to distribute loans to small auto suppliers.
- Labeled Drive Forward Fund, the government-backed lending scheme aims to help small- and medium-sized auto suppliers retool for EVs.
- The news comes after the U.S. Department of Commerce proposed a ban on Chinese software and hardware.
As the U.S. prepares to move its electric vehicle supply-chain away from China with tariffs on Chinese-made EVs and a proposed ban on Chinese and Russian software and hardware, it's also boosting support for its homegrown EV supply-chain network.
Chicago-based investment firm Monroe Capital today announced plans to raise $1 billion to facilitate loans for small- and medium-sized auto suppliers. The White House lauded the announcement, saying the fund aims to help small auto businesses make the tough transition towards EVs.
The Drive Forward fund, as Monroe Capital calls it, would be a "government-guaranteed" scheme to help smaller suppliers embrace electrification and diversify their businesses away from gas cars.
"A focus will be placed on manufacturers that are well-positioned to lead in the future of the automotive industry and need additional capital and support to grow their manufacturing capacity," the White House said in a statement.
Auto suppliers have an outsized role in the transition towards electrification as they employ more than 250,000 workers across the country, including in Michigan, Ohio and other parts of the nation, the White House added.
They're the backbone of the shift to EVs but have struggled so far. They need to retrain their workforce, retool plants, navigate parts shortages and on top of all that, help automakers comply with tough new EPA emissions rules that will kickstart in 2027.
Without a financial shot in the arm from the government, it would be tough. The White House added that the support would go to "companies making critical investments in the transition from internal combustion engine (ICE) production to electric vehicles (EV)."
This is in addition to the U.S. Department of the Treasury's $9.1 million grant to establish the Michigan Auto Supplier Transition Program to help the state's small businesses embrace EVs.
The announcements for local support for EVs comes in the wake of the Commerce Department's latest proposal to ban Chinese and Russian software in cars sold in the U.S. from 2027 and hardware from 2030.
The U.S. believes that software and hardware with links to China or Russia, such as vehicle connectivity systems, cellular and WiFi network and advanced driver assistance systems pose a national security risk.
If the ban is finalized, the prospect of Chinese EVs ever landing on U.S. shores would get even slimmer.
