The United States has set up a new $1 billion fund to help auto parts suppliers transform into electric vehicles

According to media reports, the U.S. government has established a new fund of up to $1 billion through the investment firm Monroe Capital to finance the U.S. auto parts supply chain.
 

The U.S. government stated that the new fund, called Drive Forward Fund LP, will "help small and medium-sized auto parts manufacturers secure lower-cost financing to refinance, continue growing, and diversify their businesses." It also noted that more than 250,000 people across the U.S. are employed by small and medium-sized auto parts suppliers. The fund will obtain government-backed low-cost loans through a license issued by the U.S. Small Business Administration (SBA) and plans to begin raising funds after completing the SBA Small Business Investment Company licensing process.
 

Monroe pointed out that, unlike large manufacturers, small and medium-sized auto parts suppliers often lack access to financing, limiting their ability to increase production of electric vehicle parts. Monroe CEO Ted Koenig stated, "We believe the new fund is critical to driving growth and innovation in the U.S. automotive supply chain."
 

On September 23, the U.S. Treasury Department also announced a $9.1 million grant to launch the Michigan Auto Supplier Transition Program, aimed at helping smaller companies secure financing for electric vehicle parts production.
 

John Bozzella, CEO of the Alliance for Automotive Innovation, said the fund will help ensure that smaller parts suppliers can access private financing to modernize. Bozzella emphasized that a successful electric vehicle transition "requires a cutting-edge automotive supply chain to maintain national competitiveness and support economic and national security."
 

Reuters reported that the U.S. government's new tariffs on Chinese electric vehicles, batteries, components, and key minerals, along with restrictive electric vehicle tax credit regulations, are prompting automakers to shift their supply chains. Additionally, automakers are facing strict new emissions regulations, pushing them to produce cleaner cars.