Shifting to onshore battery production for electric cars (EVs) in the United States commenced during the COVID-19 pandemic. By 2019, only two battery factories were operational, with another two under development. Currently, there are about 34 battery factories either in planning stages, under construction or operating in the U.S.
Inflation Reduction Act Effects
Inflations reduction act signed into law on August 16th,2022 by President Joe Biden has accelerated the process of creating battery factories. This trend was significantly boosted through incentives provided by IRA despite it being not an initial catalyst. The bill is aiming at reducing American dependence on Chinese batteries and supporting Biden’s objective of ensuring that half of all new vehicle sales are electric or hybrid by 2030. Specific guidelines regarding the sourcing and production of batteries must be met by vehicles to qualify for a full $7,500 EV tax credit.
Incentives and Investments
This IRA includes compelling incentives such as mandating that sixty percent (60%). Its batteries components be manufactured and assembled in North America by 2024 rising to hundred percent (100%) by 2029. Moreover, further production is stimulated via advanced manufacturing credits. Which are $35 per kilowatt hour for battery cells and $10 per kWh for battery modules.
Cumulatively, automakers, together with their counterparts in the batterys business have spent or promised $112 billion building domestic operation facilities intended to have a total annual capacity exceeding twelve hundred gigawatt-hours which is enough for about eighteen million EVs till 2030. Beyond batteries sector alone, this incentive has raised an estimated private investment worth $245 billion towards clean energy projects including technology manufacturing.
Notable Auto Manufacturers & Battery Manufacturers
BMW: Investing /$1./7bn in South Carolina featuring a facility assembling batteries.
Ford: Partnered with SK On to build three plants for making batteries as well constructed. A lithium-iron-phosphate plant in Michigan with CATL’s technology.
General Motors: Plans three battery plants through its JV with LG Chem and another with Samsung SDI.
Tesla: Expanding its Gigafactory in Nevada and Texas, and building a lithium refinery in Texas.
Toyota: Building a battery plant in North Carolina and a battery lab in Michigan.
Volkswagen: Established PowerCo SE to build a battery factory in the Canada.
It is worth noting that AESC, Gotion, Kore Power, LG Energy Solution, as well as Panasonic are among. The other manufactures of batteries that are ploughing huge sums into North American facilities.
SUMMARY
Both 2020 lessons from COVID-19 pandemic and incentives provided by IRA have led to substantial momentum behind onshoring of US battery manufacturing. Domestic EV batterys production is set to make significant progressions shifting away from foreign providers thus propelling electric vehicles movement.
