President Biden plans to announce Wednesday that his administration will award up to $8.5 billion in subsidies to Intel, a major investment to boost the country’s semiconductor manufacturing, during a tour of battleground states aimed at advancing his economic agenda to sell.

Mr. Biden will make the announcement during a visit to the Intel campus in the Phoenix suburb of Chandler, Arizona, White House officials said. The award, which will go toward building and expanding Intel facilities in the United States, is the largest given by the federal government with funding from the CHIPS Act, which lawmakers passed in 2022 to help restore the United States as a leader . in semiconductor production.

The Biden administration, which has $39 billion in subsidies to distribute, is leading an ambitious effort to ramp up production of the tiny chips that power everything from smartphones to computers and cars. The effort is central to Mr. Biden’s goal of reducing America’s dependence on foreign countries: Although semiconductors were invented in the United States, only about 10 percent of the world’s chips are made domestically.

In addition to the grants, the federal government plans to grant Intel up to $11 billion in loans on what the company described as generous terms. Intel is also expected to claim federal tax credits that could cover 25 percent of the costs of its U.S. expansion projects, which are expected to cost more than $100 billion over five years.

The grants are intended to finance the company’s construction plans in Arizona, Ohio, New Mexico and Oregon. The projects are expected to create more than 10,000 manufacturing jobs and about 20,000 construction jobs, according to Biden administration officials.

In Arizona, the money will help finance Intel’s recent construction of two advanced factories and the modernization of another factory. The funds will also help establish a brand new location near Columbus, Ohio, starting with two factories, the company’s first move into a new U.S. region in more than 40 years.

In Rio Rancho, NM, Intel will use the federal funds to convert two factories into advanced packaging facilities, where chips are assembled to improve performance and reduce costs. The company will also expand and modernize an innovation center in Hillsboro, Oregon, which is expected to advance the company’s technology leadership and development of new innovations.

Gina Raimondo, the Commerce Secretary, whose department oversees the distribution of the subsidies, said the award would support production of the country’s most advanced semiconductors, used in artificial intelligence, smartphones, supercomputers and the most sensitive military hardware , would help boost. . The United States currently produces none.

“We rely on a very small number of factories in Asia for all our most advanced chips,” Ms. Raimondo said on a call with reporters. “That is untenable and unacceptable. It is an economic security problem, a national security problem, and we are going to change that.”

Ms. Raimondo said the Intel award would be the largest subsidy to a chipmaker under the new program. The investment will also help the United States produce about 20 percent of the world’s most advanced chips by the end of this decade, she said.

Mr. Biden and his Democratic allies see the semiconductor investments as an important way to try to change perceptions of the economy among voters in battleground states like Arizona.

“We haven’t talked to people about the issues that President Biden has addressed, and that’s what we’re committed to doing,” Yolanda Bejarano, chairwoman of the Arizona Democratic Party, said Tuesday, adding that Democrats should talk more . about the effects of semiconductor investments.

While Intel will have to meet certain milestones before the money is distributed, senior Biden administration officials said they expected the money to start flowing to the company by the end of this year.

Intel CEO Patrick Gelsinger told reporters in a briefing Tuesday evening that the government stimulus was a proud moment for his company and a major achievement for politicians of both parties. While he is pleased with the incentives earmarked for Intel, he says officials may need to invest more in the industry to reverse decades of shifting investment from the United States to countries in Asia.

“It won’t be solved in one three- to five-year program,” Mr. Gelsinger said. “I think we need at least a CHIPS 2 to do that job.”

Intel is the fourth company to receive a federal award under the new program, bringing the total number of announced grants to more than $10 billion. The first three grants – to GlobalFoundries, Microchip Technology and BAE Systems – were for makers of older chips, which were made with older manufacturing processes but are still used in many products such as cars and dishwashers.

Biden administration officials are expected to announce more prices in coming months for other major chip makers, including Taiwan Semiconductor Manufacturing Company, Samsung and Micron Technology. These companies have also made major investments in new or expanded semiconductor factories in the United States in recent years.

The United States’ dependence on Asia for its chips has become even more apparent with the rise of artificial intelligence; Nearly all the chips used to power the latest generative AI services were manufactured in Taiwan by TSMC, although designed by Silicon Valley company Nvidia.

Intel has tried to change that by developing new manufacturing technology, building chips designed by other companies and lobbying heavily for legislation. The investment in Intel is intended to give US companies a leading position in the AI ​​industry by ensuring a domestic supply of advanced chips.

About $50 million in federal funding will be set aside for Intel to spend on training and developing its workforce. Many semiconductor companies and industry groups have expressed concerns about possible shortages of technicians, engineers and other workers to fill all the positions that will be created once the facilities are built.

In total, private companies have announced more than $240 billion in investments in semiconductors and electronics since Biden took office, administration officials said. However, some chip makers have encountered obstacles in their efforts to expand their domestic production capacity, leading to delays.

Top officials at the Federal Aviation Administration plan to tell a House panel on Tuesday that the agency will increase its presence on the ground to monitor aircraft production.

The official, Mike Whitaker, will appear before lawmakers a month after a door panel was blown off a Boeing 737 Max 9 plane in flight, raising new questions about Boeing's quality control practices, as well as the FAA's oversight of the planemaker .

“Going forward, we will have more agents on the ground closely monitoring and monitoring production and production activities,” Mr. Whitaker plans to say in his testimony before the House Transportation and Infrastructure Committee's Aviation Subcommittee, according to excerpts provided by his office have been released.

“Boeing employees are encouraged to use our FAA hotline to report any safety concerns,” Mr. Whitaker said. “And we will consider the full extent of our enforcement authority to ensure that Boeing is held accountable for any non-compliance.”

The incident involving the door panel, known as a door plug, occurred on an Alaska Airlines flight shortly after it took off from Portland, Oregon, on January 5. The FAA quickly grounded similar Max 9 jets. At the end of January it was said that they could fly again after inspection.

The National Transportation Safety Board is expected to release its preliminary report on the episode Tuesday.

Over the past month, the FAA has taken a hard line against Boeing, blocking the company from expanding production of the 737 Max series until quality control issues are resolved. It's another crisis for the planemaker involving the Max, following two fatal crashes involving Max 8 jets in 2018 and 2019.

The door plug incident has also prompted scrutiny into the FAA's record of oversight of Boeing and its long-standing practice of allowing the aircraft manufacturer's employees to perform safety work on behalf of the government .

In his forty-year career, William Lucas has seen virtually every step in the erosion of the American apparel industry. As general manager of Eagle Sportswear, a Middlesex, N.C., company that cuts, sews and assembles clothing, he hopes to keep what's left of that industry intact.

Mr. Lucas, 59, has invested hundreds of thousands of dollars in training his employees to use more efficient techniques that come with financial bonuses to get employees back to work faster.

But he fears his investments could be undermined by a US trade rule.

The rule, known as de minimis, allows foreign companies to ship goods worth less than $800 directly to U.S. customers while avoiding tariffs. Mr. Lucas and other textile makers in the Carolinas, once a textile hub, argue that the supply — nearly a century old but exploding in use — is motivating retailers to rely even more on foreign manufacturers to keep prices low.

Defenders of the rule say a lack of American competitiveness is not to blame. But domestic manufacturers say it mainly benefits China, at the expense of American manufacturers and workers.

“It's just hard to compete with that,” Mr. Lucas said. “Someone just has to change the law. Someone just needs to change the rules.”

During the pandemic, as e-commerce purchases surged, so did the use of de minimis.

In fiscal year 2016, 150 million packages entered the United States tariff-free under this policy, but by 2023 that number had risen to more than a billion, according to Customs and Border Protection. About half consists of textile and clothing products.

A conference report found in June that Shein and Temu, ultra-fast fashion retailers founded in China, accounted for nearly 30 percent of sub-de minimis parcels. (Shein and Temu have said they are open to a rework of the exemption.) But while U.S. manufacturers say the rule is one of their biggest challenges, it's not the only one.

Apparel sales are coming off the pandemic peak and are down. That means fewer orders for the remaining operators in the Carolinas. Bryan Ashby, president of Carolina Cotton Works of Gaffney, S.C., said he purchased equipment a few years ago to handle higher capacity, but in late summer he noticed his buyers pulling out.

Eight textile factories in the southern United States closed between August and December, according to the National Council of Textile Organizations, a lobbying group. In November, one yarn factory in North Carolina attributed part of its demise to the increasing use of de minimis.

“When you have factories open and closing for so long, it's a canary in the coal mine in terms of how policies and economics contribute to the economic damage the industry is facing,” said Kim Glas, president of the council.

For most of the 20th century, mills were plentiful in the region. That began to change in the 1990s, after the North American Free Trade Agreement was signed, which eliminated U.S. tariffs on products from neighboring countries, and major multinational companies began moving apparel production to Mexico. In 2001, when China joined the World Trade Organization, retailers flocked to Asia in search of cheap labor to produce their goods. According to the Bureau of Labor Statistics, employment in the U.S. apparel industry has fallen 65 percent since 1994.

The remaining businesses are largely family-run and privately owned. They consistently send money back to their companies to pay for expensive new equipment and automation to stay competitive. Many produce items for the U.S. military, which requires some garments to be American-made, or for companies whose mission is just that. According to the American Apparel and Footwear Association, only 2.9 percent of clothing sold in the United States was made domestically in 2022.

Halsey Cook, CEO of Milliken, a 159-year-old manufacturer in Spartanburg, S.C., that makes items such as military clothing, automotive carpeting and merchandise for Patagonia and Carhartt, said de minimis made the textile industry “feel bad the pain in a new way.” ”

“That clothing industry had largely already gone abroad,” he said. The remaining American textile manufacturers have adapted to the reality of free trade agreements, Mr. Cook said, but the tremendous growth in the use of de minimis “has just completely opened up and undermined that system.”

In the cotton fields, ginning mills, yarn mills, dye factories and cut and sew shops of the Carolinas, conversations are animated as they turn to the law of commerce, which depends on the work being done.

Parkdale Mills, one of the nation's largest yarn manufacturers, has a facility in Gaffney, SC that processes only cotton. Men transport bales of cotton on forklifts, and automated equipment cleans the cotton and transforms it into spun yarns that can be made into fabric. Many employees at Parkdale have been there for decades, and Davis Warlick, the executive vice president, greets his employees on the floor with warm familiarity.

“We are trying to create more jobs,” Mr. Warlick said after touring the 400,000-square-foot facility. But he said he and his associates remained fearful. “All of that is threatened every day by one bad, ill-informed decision on Capitol Hill. And all this disappears and they do not understand.

The apparel industry is one of the most price-sensitive sectors and retailers will take every opportunity to save as much money as possible.

“If you erode any aspect of the supply chain, it hurts everyone,” said Ms. Glas of the National Council of Textile Organizations. That includes American farmers and those who work with them, she added.

Tatum Eason knows this well. She owns Enfield Cotton Ginnery in eastern North Carolina, which cleans hundreds of bales of cotton for farmers in the surrounding community. She rinses away the dirt and other impurities from the cotton free of charge and makes money by selling the cottonseed released during cleaning. (That cottonseed is later used for cottonseed oil and feeding livestock in the United States and tilapia fish in Saudi Arabia, she said.)

In 2023, she processed half of the cotton she used the year before. And with high interest rates making operational loans more expensive for farmers and the price of cotton futures falling, she thinks the coming year could also be challenging. Her business depends on farmers' optimism, and the poor climate could mean they grow less cotton in April.

She had filled her office with a carousel of bags of Miss Vickie's potato chips and a gum machine; great incentives to get the farmers to come back to her, so that she could encourage them that it was worth growing cotton.

“We brainstorm about what we can do in our business so that we know for sure what we're going to gin every year,” she said, sitting in her wood-paneled office. “It's worrying.”

The e-commerce boom caused by the pandemic wasn't the only factor in the proliferation of de minimis shipments. In 2016, Congress increased the de minimis cap from $200 to $800 in an effort to lower costs for importers, speed up delivery times for small and medium-sized businesses, and reduce customs and border protection paperwork.

The textile and clothing industry wants to rein in the use of this provision, but has not yet agreed on a proposal to send lawmakers. But there seems to be agreement that manufacturers in China and across Asia will have free access to the US consumer market.

There are bills in Congress that would ban some countries, such as China and Russia, from using this provision, but none call for its elimination.

Supporters of de minimis say eliminating them could lead to higher costs for consumers and businesses that import goods. The competitive problems facing the textile industry are not caused by this provision, said John Pickel, senior director of international supply chain policy at the National Foreign Trade Council, a lobbying group that supports de minimis.

“I think it's a bit of a red herring to hang your hat on de minimis as some sort of bogeyman of why certain domestic industries are not competitive,” Mr. Pickel said.

As details and bills are published in Washington, U.S. manufacturers continue to fill orders.

In a nondescript one-story building at Eagle Sportswear, a staff of 75 people fills orders for hoodies, shorts and sweatpants for customers like the U.S. Army and American Giant, a privately held retailer focused on selling domestically made clothing .

Up to five workers stand side by side and share the tasks required to complete a garment. It's a departure from the traditional 'batch sewing' approach, where one person sits and works on an individual task before a garment moves through the production line. By having multiple hands and eyes on a piece of material and addressing it immediately, the company aims to improve quality control and provide more value to customers.

Pay starts at €11 per hour and can go up to €17, including bonuses for achieving production goals. It used to take an hour to make a garment, Mr. Lucas said, but that time has been reduced to 43 minutes.

Mr. Lucas says he has had to charge American Giant more to make some of his clothing in the past year, partly because of orders that require smaller batches. Bayard Winthrop, who founded American Giant in 2012 and put together a domestic supply chain that can make his company's $138 cotton hoodies, says that's OK.

Many retailers in his position have decided to go abroad to produce more for less. Keeping manufacturing — and those jobs — in the United States is more important to him, he said.

“The people here should be celebrated as the heroes of this country, and we have lost our way for a long time,” he said, sitting in Mr. Lucas at Eagle Sportswear. “I just don't know why. I think it should be celebrated more – more celebrated from a policy perspective.”

Ukraine hit an oil depot in Russia with a drone strike on Friday, officials from both sides said. This is the latest in a series of recent attacks targeting Russian oil facilities, as Kiev increasingly seeks to target critical infrastructure behind Russian lines.

Alexander Bogomaz, governor of Russia's Bryansk region, which borders Ukraine, said Oil tanks in the town of Klintsy caught fire after a drone dropped ammunition on the depot. The drone, he added, was brought down by electronic interference. A Ukrainian intelligence official, speaking on condition of anonymity to discuss sensitive military matters, said Ukraine was behind the attack.

Friday's attack was the fourth attack on a Russian oil facility in the past three weeks. Experts say it is an attempt by Ukraine to set back Russia's military capabilities by targeting facilities that supply fuel to tanks, fighter jets and other critical military equipment.

“Strikes on oil depots and oil storage facilities are disrupting logistics routes and delaying combat operations,” said Olena Lapenko, an energy security expert at DiXi Group, a Ukrainian think tank. “The disruption of these supplies, which are like blood to the human body, is part of a broader strategy to fight Russia on the battlefield.”

These attacks are unlikely to have a substantial impact on the overall posture of the fighting, in which Russia has gone on the offensive in recent months. But they remain important to Ukraine, which has looked for ways to wreak havoc beyond its largely gridlocked front line. Without sufficient weapons and troops to regain the initiative on the ground, Kiev has increasingly turned to guerrilla tactics to disrupt Russian operations, including sabotage activities against railway infrastructure and ammunition depots.

Oleksandr Kamyshin, Ukraine's Minister of Strategic Industry, said on Thursday that an “asymmetric war” is underway. He claimed responsibility for an attack Thursday targeting an oil storage facility in St. Petersburg, which he said involved a domestically produced drone that flew 1,250 kilometers, or about 775 miles.

“I am sure we will see more and more things happening this year,” Mr. Kamyshin said at a meeting panel discussion at the World Economic Forum in Davos, Switzerland.

Although the attack in St. Petersburg did not appear to cause serious damage, images from the Klintsy oil depot showed an extensive fire between several tanks. The Russian state news agency TASS said the fire covered an area of ​​about 1,000 square meters, or about 10,700 square feet, and that four gasoline tanks were on fire.

Mr. Bogomaz, the Russian governor, said in a social media post that more than 140 firefighters were trying to extinguish the blaze. He left one video they showed how they sprayed water on blackened oil tanks from which huge plumes of black smoke rose.

Energy infrastructure has been a major theater in the war. Last winter, Russia bombarded Ukraine's energy facilities with drones and missiles, plunging Ukrainians into cold and darkness, in what Moscow saw as an attempt to weaponize winter and demoralize the population. Ukraine managed to survive the attacks thanks to Western-supplied air defense systems and engineers' round-the-clock work to repair vital equipment.

Ukraine, on a smaller scale, has targeted Russian oil and gas infrastructure since the start of the conflict. But the recent wave of attacks could indicate that energy infrastructure has now become a crucial objective for Kiev.

Two other drone strikes, on December 29 and January 9, resulted in fires at a refinery in the southwestern Krasnodar region of Russia and at one fuel factory in Oryol, a town not far from Klintsy. The Ukrainian army was involved on both occasions claimed responsibility in Ukrainian news media.

By targeting oil facilities, Ukraine is not only attempting to disrupt the supply of the Russian military, but is also targeting assets that generate substantial revenues in support of Moscow's war effort.

Ms. Lapenko, the energy security expert, said Moscow had earned more than $400 billion from oil exports since the start of the war. Russia has partly managed to circumvent international sanctions by using alternative financial services and even investing in a 'shadow fleet' to clandestinely export its oil.

“We see that the imposed sanctions do not work effectively enough, so the aggressor still receives enough money to wage war,” Ms. Lapenko said.

In addition to the attacks on oil facilities, Kyiv has carried out at least four attacks on electricity substations since September, some of which Russian local authorities say have led to power outages for civilians. The Ukrainian military claims it only attacks power plants directly linked to the Russian military campaign.

Several Ukrainian officials had said in recent months that Ukraine would respond to Moscow's attacks on critical infrastructure.

'Let them begin. They will also get an answer,” said Kyrylo Budanov, head of Ukraine's military intelligence. told The Economist magazine added in September that its services were working on a limited deterrence and retaliation campaign.

Daria Mitiuk reporting contributed.

The Biden administration has begun pumping more than $2 trillion into U.S. factories and infrastructure, investing vast sums in an effort to strengthen U.S. industry and fight climate change.

But the effort faces a familiar threat: a wave of low-priced products from China. That's drawing the attention of President Biden and his aides, who are considering new protectionist measures to ensure U.S. industry can compete with Beijing.

As American factories churn to produce electric vehicles, semiconductors and solar panels, China is flooding the market with similar goods, often at significantly lower prices than American competitors. A similar influx is also hitting the European market.

U.S. executives and officials claim China's actions violate global trade rules. The concerns are leading to new calls in America and Europe for higher tariffs on Chinese imports, potentially escalating the already contentious economic relationship between China and the West.

The Chinese imports reflect a surge that undermined the Obama administration's efforts to boost domestic solar production after the 2008 financial crisis and forced some U.S. startups out of business. The government retaliated with tariffs on solar equipment from China, sparking a dispute at the World Trade Organization.

Some Biden officials are concerned that Chinese products could again threaten the survival of U.S. factories at a time when the administration is spending huge sums to boost domestic manufacturing. Administration officials appear likely to increase tariffs on electric vehicles and other strategic goods from China as part of a review of tariffs former President Donald J. Trump imposed on China four years ago, according to people familiar with the matter. case. That review, which has been underway since Mr. Biden took office, could finally be completed in the coming months.

Congress is also calling for more protection. In a letter dated January 5 Speaking to the Biden administration, bipartisan members of a House committee expressed concern that China would flood the United States with semiconductors. Lawmakers wondered whether the government could impose a new “component” tariff that would tax a chip imported into another finished product.

That followed A November letter in which members of the same committee recommended that the Biden administration consider a new trade case over China's electric vehicle subsidies, which could result in additional tariffs on cars.

U.S. Trade Representative Katherine Tai told lawmakers she shared her concerns about Chinese practices in the electric car industry, according to a Jan. 4 letter shared with The New York Times. Ms. Tai told the committee that the administration “must work with U.S. companies and labor unions to identify and deploy additional measures to help overcome Chinese state-owned industrial targeting in this sector.”

The United States has maintained tariffs on hundreds of billions of dollars of Chinese products over the past five years, seeing this as a way to offset Beijing's ability to undercut American manufacturers by selling cheaper products to the United States. Mr. Biden has sought to further help American companies with billions in subsidies aimed at boosting U.S. production of clean energy technology such as solar panels, electric vehicles and semiconductors.

Yet Chinese industrial policy spending still persists far exceeds that of the United States. Faced with an economic slowdown and a gradual bursting of the real estate bubble, the Chinese government has recently redoubled its efforts to promote exports and support the factory sector.

Beijing is mainly focusing on investments in high-tech products of strategic importance, such as electric vehicles and semiconductors, said Ilaria Mazzocco, a senior fellow in Chinese business and economics at the Center for Strategic and International Studies, a Washington think tank.

“Those are the types of industries the rest of the world wants too,” she said.

Part of China's success comes from its larger market – which gives Chinese companies the scale and ability to hone their products – along with its vast pool of talented engineers. China sold approx 6.7 million fully electric vehicles last year, for example, compared to approx 1.2 million units in the United States.

The Chinese government has said it competes fairly and described the US trade measures as protectionist.

But Wendy Cutler, vice president of the Asia Society Policy Institute and a former trade negotiator, said China's clean energy and semiconductor industries have received a lot of state support, in the form of tax credits, access to cheaper energy and equity injections.

“The list goes on,” she said. “If Chinese companies use these types of systems, it will only lead to overcapacity.”

In the United States, when supply of solar panels exceeds demand, factories shut down their lines, lay off workers and try to realign capacity, said Michael Carr, executive director of the Solar Energy Manufacturers for America Coalition, representing the USA. established solar energy producers.

“It doesn't work that way in China,” he said. “They just kept building and building and building.”

According to analysts at Wood Mackenzie, an energy research firm, China invested more than $130 billion in the solar sector last year and is positioned to bring enough wafer, cell and panel capacity online this year to meet annual global demand to be met until 2032.

At the end of last month, two American companies filed a legal challenge against a temporary moratorium the Biden administration placed on tariffs on imported solar panels.

China's heavy investments in semiconductors, including a new $40 billion fund to prop up the industry are also troubling companies investing in new U.S. chip facilities.

China accounts for a relatively small share of global chip production – only approx 7 percent in 2022. But experts say the country spends more on its semiconductor industry than the United States and Europe combined, and that it could become the largest chip manufacturer in the world for the next ten years.

Dan Hutcheson, the vice chairman of research firm TechInsights, said the fear was that China would do for semiconductors what it did for shipping, solar cells or steel: build up excess capacity and then put foreign competitors out of business.

“It's a legitimate fear because the weakness of Western companies is that they have to be profitable,” he said.

The United States can – and does – impose tariffs on Chinese exports that are unfairly subsidized or sold into the U.S. market for less than they cost to produce. Earlier this month, the country lowered import duties more than 120 percent on Chinese steel.

But even if Chinese goods are blocked from the United States, they can flow to other countries. That pushes global prices to levels at which U.S. companies say they cannot compete, and pushes U.S. companies out of foreign markets, reducing their revenues and competitiveness.

Some say the United States should just do that embrace cheap Chinese-made solar panels and older chipsrather than imposing tariffs that raise costs for American consumers and factories that use imported inputs.

Scott Lincicome, a trade expert at the libertarian Cato Institute, said it didn't make economic sense for the United States to try to outdo China, especially on non-military-related goods.

“Is the correct answer, do we do our own subsidies? Or should we be a better economist and say, 'We're actually letting foreign governments subsidize our consumption like crazy, we don't really care?'” Mr Lincicome said.

But most officials in Washington now see China's dominance in key markets as a significant risk, given rising tensions between the countries and China's imposition of Certainly export bans. China produces about 80 percent of the world's solar panels, almost 60 percent of electric vehicles and more than 80 percent of electric vehicle batteries.

The average price for an electric vehicle in China is about $28,000, compared to about $47,500 in the United States, according to Dunne Insights, an electric vehicle market research firm. In the fourth quarter of last year, Chinese car manufacturer BYD delivered results more electric vehicles than Tesla, surpassing the American company for the first time.

Chinese electric vehicles have become extremely popular in Europe, prompting the European Union start an investigation in illegal subsidies. So far, Chinese electric vehicles have not gained a foothold in the United States, which imposes high tariffs on these imports.

As part of the climate law that Mr. Biden signed in 2022, buyers of electric vehicles that are primarily sourced and assembled in the United States, rather than in China, will also receive lucrative tax credits. Still, some officials worry that Chinese vehicles are generally so much cheaper than American alternatives that consumers might choose to buy them anyway.

Keith Bradsher contributed reporting from Shanghai.

Xing Wei graduated from a vocational high school in northeastern China in 2003 and went to work as an electrician at an auto parts factory in the south of the country. The only set of wheels he could afford was a black three-speed bicycle.

He earned $1,150 a year and shared a sweltering dormitory with three other workers. “There was air conditioning, but because we had to pay for the electricity ourselves, we basically didn’t turn it on,” Mr Xing said.

Twenty years later, Mr. Xing, 42, earns almost $60,000 a year. He works as a senior electrician installing industrial robots in electric car factories for Nio, a Chinese car manufacturer. Last winter he bought a $52,000 Nio ES6 SUV.

The Chinese electric vehicle market is the largest and fastest growing in the world. A frenzy of factory construction and expansion has made electricians and robotics specialists a hot commodity.

“If you want to recruit people with relevant experience, there are relatively few people in this industry,” Mr Xing said.

More than 1.5 million people now work at dozens of electric car companies in China and their suppliers. The largest of these, BYD, has 570,000 employees, compared with 610,000 globally for Detroit’s Big Three combined.

As parts of China’s economy slow, Beijing must shift workers to sectors that are still growing rapidly, especially electric vehicle production. But Beijing faces a shortage of vocational training and a surplus of young people with university degrees who are not interested in factory work.

Most in demand are skilled technicians and engineers like Mr. Assembly line workers in car factories earn less than half his salary.

Beijing estimated in 2021 that the country had more than twice as many skilled technician jobs as the actual number of qualified workers.

A Shanghai government report last year found that the highest-paid 10 percent of senior factory technicians earned at least $51,000 a year. Workers with these skills change jobs regularly: Before moving to Hefei in central China to work for Nio two years ago, Mr.

Fueled by loans from state banks and help from municipalities, Chinese automakers are building electric car factories faster than sales are rising, leading to a price war that has left most companies losing money. This has caused a shock in the sector. Nio, for example, announced in November that it would lay off 10 percent of its employees. None of the cuts were in production, Nio said.

“We are already very concerned about the shortage of hands,” said Ji Huaqiang, Nio’s vice president of manufacturing.

The seeds of the labor shortage were planted years ago when the Chinese government’s economic planners failed to see the scale of the electric car boom and failed to train enough workers for it.

In 2016, the Ministry of Industry and Information Technology predicted that the electric car industry would need 1.2 million workers by 2025, warning that China then had only 170,000 people with the necessary skills.

It is fair to say that more than two-fifths of the country’s eleven million graduates study subjects related to science and engineering each year. That’s double the share in the United States, where there is also a shortage of welders, electricians and other industrial workers.

But many of these graduates aspire to work in white-collar jobs at Internet companies and government, not factories.

For decades, factories in China could rely on a steady stream of farmers’ sons and daughters arriving in the cities and taking almost any job, no matter how boring.

One of them was Mr. As a teenager, he was determined to leave his hometown of Hongshi, near China’s border with North Korea. He went to a vocational high school, where his teacher told him to look for work in southeastern China, near Hong Kong. As soon as he graduated from high school, he packed his bags.

In Guangzhou, he found a job at a factory that stamped body parts for a nearby Honda assembly plant. When new equipment arrived, foreign experts connected it to laptops and made all the decisions during test runs. Mr.

“I could only look at them like a doll,” he said.

It left a mark on him. He lived on free meals at the factory cafeteria and saved his wages, $100 a month, to buy a $1,195 IBM laptop. He studied automation on weekends through an adult education program.

The training would help him build a career in the electric vehicle sector. In 2019, he had bought an apartment of almost 1,100 square meters in a suburb of Ningbo, 1,300 kilometers from Guangzhou. Today, his parents live in the apartment, while Mr.

The Chinese government has tried to train a generation of workers like Mr. Xing, with mixed results.

In 2014, Xi Jinping, China’s top leader, urged government and Communist Party officials, as well as companies, to “cultivate hundreds of millions of high-quality workers and technical and skilled personnel.”

But that goal has collided with the rising ambitions of Chinese parents who have shown less interest in sending their children to vocational high schools to learn the skills of an electrician, a machinist or other technician.

The number of teens attending vocational and technical high schools fell 25 percent between 2010 and 2021, the year with the most recent data. At the same time, the number of students in academic secondary schools hardly changed.

“Factory jobs are often associated with the ‘three D’s’: dirty, dangerous and demeaning,” said Minhua Ling, an associate professor specializing in China’s vocational education system at the Geneva Graduate Institute. Younger Chinese “find it demeaning,” she said. “The feeling that you are a machine has no meaning to them.”

About 60 percent of China’s population when it turns 18 enrolls in college. In 2000 this was still 10 percent.

Companies in China have been slower than those in some countries, such as Germany, in establishing long-term learning programs to develop future leaders on the factory floor.

“Demand increased so quickly that the education system was flat-footed, and it takes a few years to adequately prepare and train top technicians,” said Gerard A. Postiglione, professor emeritus of higher education research at the University of Hong Kong.

An increasingly steep decline in birth rates makes the challenge even more urgent.

The number of young people turning 18 every year in China has fallen by more than 40 percent since the mid-1980s. Based on the number of babies born in recent years, the number of 18-year-olds will halve in the coming years.

China, and especially the electric car industry, is trying to use automation to address the shortage of willing hands.

According to the International Federation of Robotics, companies in China will have installed more industrial robots by 2022 than the rest of the world combined. It surpassed its biggest industrial rivals, Japan, the United States, South Korea and Germany.

By 2027, Nio plans to replace half of its management positions with artificial intelligence and a third of its factory workers with robots, said Mr. Ji, the company’s vice president of manufacturing. One of Nio’s factories makes 300,000 EV motors per year and has just 30 employees.

“All these companies are struggling to find workers,” said Zhou Linlin, CEO of Principle Capital, a Shanghai-based investment firm with stakes in numerous Chinese factories. “That’s why all companies are looking for automation and robotics solutions.”

But robots can only offset part of China’s growing demand for factory technicians.

Volkswagen is hiring for a new research center near Nio, in Hefei, which will staff 3,000 engineers to develop electric cars, and is preparing to build electric cars there.

That means even more demand for specialists like Mr. Xing, who is already struggling to fill his own team of electricians. “We are also constantly recruiting,” he said, “and we are unable to recruit suitable, relevant staff.”

Li You And Joy Dong research contributed.

The United Automobile Workers union announced Wednesday that it is undertaking an ambitious initiative to organize factories owned by more than a dozen non-union automakers, including Tesla and several foreign companies — a goal that has long eluded it.

The move comes weeks after the UAW won new contracts from General Motors, Ford Motor and Stellantis that included pay increases of 25 percent or more over four and a half years for the 146,000 members employed there.

In addition to Tesla, the campaign targets two other electric vehicle start-ups, Lucid and Rivian, and ten foreign-owned automakers: Toyota, Honda, Hyundai, Nissan, BMW, Mercedes-Benz, Subaru, Volkswagen, Mazda and Volvo.

If the UAW gains a foothold among these companies, it could mark a major shift in the U.S. auto industry, where non-union manufacturers have long had a significant cost advantage over Detroit automakers.

The union said the organizing drive was prompted by demands from several thousand workers at non-union factories.

“Workers across the country, from the West to the Midwest and especially in the South, are trying to join our movement and join the UAW,” the union’s president, Shawn Fain, said in a statement .

On Wednesday, the UAW activated websites where workers can electronically sign union cards that serve as an official confirmation of their desire to have union representation. Previously, the UAW had received signed cards from more than 30 percent of the workforce at a handful of plants. the threshold required under federal law for the union to move forward with a vote on unionization, a person familiar with the matter said.

This is a development story. Check back for updates.

In Weirton, W.Va., in the heart of coal country, a company founded by MIT scientists plans to build a factory that will produce a metal and alloy crucial for clean energy, fuel cells and cleaner steel.

In Vernon, Texas, also a former coal town, a third-generation wind entrepreneur plans to manufacture turbines suitable for remote, rural locations.

And in Vandergrift, Pennsylvania, and Louisville, Colorado, a window maker plans to modernize aging factories to produce thin, insulated units that make buildings more energy efficient.

All are projects that will receive federal funding aimed at helping small and medium-sized manufacturers bring clean energy jobs to former coal communities, part of a $1 trillion infrastructure package that President Biden signed into law in 2021. The Energy Department announced the projects on Monday. .

The program is an effort by the Biden administration to win support for its agenda to reduce America’s dependence on coal, oil and gas, the leading causes of global warming. But it also points to widespread recognition that as the world transitions to cleaner energy sources such as wind and solar, workers in the fossil fuel industry – as well as in regions dependent on them – are at risk of being left behind.

Coal mining jobs have fallen dramatically in recent decades, and in 2022 there were fewer than 50,000 coal miners left in the United States, half the number a decade ago, according to U.S. figures. the latest figures of the Energy Information Agency.

And these energy workers have not found clean energy jobs, despite rapid growth in sectors like solar and wind. a recent research Research from 130 million online work profiles found that in 2021, less than 1 percent of all workers who left jobs in the coal, mining and oil and gas sectors moved to “green” jobs in the renewable energy sector.

Coal workers in particular have had a hard time during the transition, the study shows. Less than a quarter percent of workers who left fossil fuel jobs in West Virginia moved to renewable energy jobs, said E. Mark Curtis, an economist at Wake Forest University who led the study. Education was another factor: Fossil fuel workers without a college degree were significantly less likely to find clean energy jobs.

“In places like Texas or the middle of the country where there is a lot of solar and wind energy, fossil fuel communities are relatively well positioned to take advantage of renewables,” Mr. Curtis said. “Coal communities generally don’t have that, especially when you think about Appalachia.”

He said it made sense for government funding to target former coal regions and focus on manufacturing projects, because data showed former fossil fuel workers were most likely to try to transition to manufacturing jobs. “I think this is a very achievable form of transition for a lot of these workers and communities,” he said.

With the subsidy program, the United States is also trying to recapture more clean energy production, which China and other countries have come to dominate over the past decade.

The goal is to “provide new economic opportunities and ensure these communities continue to play their key role in strengthening America’s national and energy security,” said Jennifer M. Granholm, U.S. Secretary of Energy.

The program will distribute $275 million across seven projects in the first round, and the DOE said it expects the funding to be supplemented with about an additional $600 million in private investment.

The companies building the new factories said they are keen to tap into local expertise. “The most valuable asset for the project is a legacy workforce that has played an important role in the U.S. metals industry,” Boston Metal CEO Tadeu Carneiro said in an interview.

The new plant in West Virginia expects to employ 200 to 250 people and will produce ultra-pure chromium metal and high-temperature alloys that are critical materials needed for clean energy, fuel cells and steel. Currently, foreign manufacturers dominate these materials.

West Virginia Northern Community College, which teaches about 1,600 students in Weirton, said in a letter of support for the project that it was ready to set up courses and internships for students interested in employment with Boston Metal.

The proposed project, the report said, “could help revive metal production in the region after decades of decline.”

European leaders have complained for years that the United States was not doing enough to combat climate change. Now that the Biden administration has spent hundreds of billions of dollars on that case, many Europeans are complaining that the United States is going about it the wrong way.

That new criticism stems from a deep fear in Germany, France, Britain and other European countries that Washington’s approach will harm the allies it is supposed to be working with, causing much of the new investment in electric car and battery plants that has yet to materialise. were not destined to be lured away. China, South Korea and other Asian countries.

That concern is the main reason why some European leaders, including Germany’s second highest official Robert Habeck, have taken a path to Vasteras, a town about 90 kilometers from Stockholm best known for a Viking burial mound. and a Gothic cathedral.

Officials have traveled there to bring Northvolt, one of Europe’s few homegrown battery makers, to justice. Headed by a former Tesla executive, Northvolt is a small player in the global battery industry, but European leaders offer it hundreds of millions of euros to build factories in Europe. Mr. Habeck visited in February to lobby the company to push through its plan to build a factory near Hamburg, Germany. The company had considered putting off investing in the United States instead.

“It’s certainly appealing to be in America right now,” Emma Nehrenheim, Northvolt’s chief environmental officer, said in an interview in Vasteras last month. Northvolt declined to comment in detail on talks about the Hamburg plant, which the company committed to in May.

The battle over Northvolt’s plans is an example of the intense and, according to some European officials, counterproductive competition between the United States and Europe as they seek to acquire the building blocks for electric vehicle production to avoid becoming dependent on China , which dominates the battery supply. chain.

Auto experts said the tax cuts and other incentives offered by President Biden’s key climate policy, the Inflation Reduction Act, had siphoned some investment out of Europe and pressured European countries to offer their own incentives.

The United States has provoked a “massive subsidy race,” Cecilia Malmstrom, a former European trade commissioner, said at a panel discussion at Washington’s Peterson Institute for International Economics last month. She called on leaders to “jointly invest in the green transition and not compete with each other”.

Biden officials have argued that US and European policies are complementary. They have noted that government and private money going into electric cars and batteries would lower prices for car buyers and put more zero-emission vehicles on the road.

US officials add that construction of battery plants and plants for processing lithium and other materials is booming on both sides of the Atlantic.

Efforts by governments to promote electric vehicles “will encourage a degree of technological innovation and cost savings that will benefit not only Europe and the United States, but also the global economy and our global efforts to meet the challenge posed by the climate change,” said Wally Adeyemo, the deputy finance minister, in a recent interview.

The Biden administration has also spoken with European officials to make cars made from European battery materials and components eligible for US tax credits. And the administration has interpreted the IRA, which Mr Biden signed into law in August, to leave room for producers in Europe and elsewhere to take advantage.

“You see less concern from Europe that those companies are being lured from Europe to America,” said Abigail Wulf, who leads the Center for Critical Minerals Strategy at SAFE, a nonprofit organization.

Yet the law has forced European leaders to implement a new industrial policy.

In March, the European Commission, the administrative arm of the European Union, proposed the Critical Raw Materials Act, legislation to ensure the supply of lithium, nickel and other battery materials. A piece of legislation calls for the EU to process at least 40 percent of the raw materials the car industry needs within its own borders. The alliance of 27 countries also allows countries to provide more financial support to suppliers and manufacturers.

The money the United States and Europe put into electric vehicles will boost sales, says Julia Poliscanova, senior director at Transport & Environment, a Brussels-based advocacy group. The legislation, which needs the approval of the European Parliament and EU countries’ leaders, would also bring some coherence to the fragmented policies of national governments, she said.

But Ms Poliscanova added that European and US policies threaten to cancel each other out. “Because everyone is scaling at the same time, it’s a zero-sum game,” she said.

Business leaders have complained that applying for financial aid in Europe is bureaucratic and slow. The Inflation Reduction Act, which focuses on tax credits, is simpler and faster, says Tom Einar Jensen, CEO of the battery manufacturer Freyr, which is building a factory in Mo i Rana, in northern Norway, and plans to open more factories in Finland. and near Atlanta.

The IRA has led to “a dramatic rise in interest in US-produced batteries,” Mr Jensen said in an interview.

The future of European car production is at stake, especially for German companies. Mercedes-Benz, BMW and Volkswagen have already lost market share in China to local automakers like BYD. Chinese car manufacturers, including BYD and SAIC, are also entering Europe. By selling cars under the British MG brand, SAIC controls 5 percent of the European electric vehicle market, putting it ahead of Toyota and Ford in that fast-growing segment.

European automakers are frantically trying to build the supply chains they need to bring electric vehicles to market.

In France, President Emmanuel Macron wants to turn a northern region, where factory jobs have declined, into a hub of battery production.

On Tuesday, Automotive Cells Company, a joint venture between Stellantis, Mercedes-Benz and TotalEnergies, inaugurated a plant in France’s Billy-Berclau Douvrin that aims to produce 300,000 electric batteries annually by the end of 2024. ACC also plans to spend a total of €7.3 billion, or $7.8 billion, in Europe, including opening factories in Germany and Italy, a deal sealed with €1.3 billion in government support.

In Salzgitter, Germany, about 25 miles from Volkswagen’s headquarters, steel beams tower over concrete foundations as excavators and dump trucks buzz nearby. In just a few months, the contours of a battery factory have emerged from the field.

Volkswagen hopes to have battery-making machines installed before the end of the summer. By 2025, the automaker aims to produce battery cells for up to 500,000 electric vehicles per year — a timeline the company said was only possible because the factory was built on land it owned.

Volkswagen is also building a factory in Ontario, but the company made the decision to do so only after the Canadian government adjusted US incentives.

In Guben, a small town on the German border with Poland, Rock Tech Lithium, a Canadian company, is building a factory to process lithium ore. Mercedes has an agreement with Rock Tech to supply lithium to its battery manufacturers.

These projects will not come into full production in the coming years. Recently, the Guben site was an open field. The only construction activity was a truck dumping loads of crushed stone with a deafening squeal.

Europe has some advantages, including strong demand for electric cars: About 14 percent of new cars sold in the EU in the first three months of this year were twice as many as in the United States, according to Schmidt Automotive Research.

But if Europe doesn’t act quickly to help the battery industry, “you really lose momentum against the North American market,” said Rock Tech CEO Dirk Harbecke.

Chinese battery companies have largely avoided the United States for fear of a political backlash. But according to the Mercator Institute for China Studies and the Rhodium Group, Chinese battery makers have announced investments in Europe worth $17.5 billion since 2018.

Political tensions between Western governments and China have left German automakers in a delicate position. They don’t want to be too dependent on Chinese supplies, but they can’t afford to displease the Chinese government.

BMW, Volkswagen and Volvo plan to buy cells from a factory in Arnstadt, Germany, run by CATL, a Chinese company that is currently the world’s largest manufacturer of batteries for electric vehicles.

To balance their reliance on Chinese suppliers, European executives and leaders are happy to work with Northvolt, whose CEO, Peter Carlsson, oversaw Tesla’s supply chain for more than four years.

Northvolt wants to control all steps of battery making, including refining lithium and recycling old cells. That should help Europe become independent of the supply chain and ensure that batteries are produced in the most environmentally friendly way, said Ms. Nehrenheim, who is also a member of Northvolt’s board of directors. “We are de-risking Europe,” she said.

The company develops production techniques at its complex in Vasteras. Northvolt’s first full factory, at a site in Sweden 200 kilometers south of the Arctic Circle chosen for its abundant hydropower, is the size of the Pentagon. Northvolt also plans to build a US factory, but has not yet announced a location.

Still, the company is ramping up production and is not among the top 10 battery suppliers in the world, according to SNE Research, a consulting firm. And construction of the Hamburg plant is on hold until EU officials approve German subsidies.

Anne Swanson And Liz alderman reporting contributed.