$11 billion investment in electric vehicle batteries since the Inflation Reduction Act was passed in August as automakers and suppliers look to localize supply chains and leverage new manufacturing credits to meet procurement requirements is announced.
Our Next Energy, or ONE, last week Spend $1.6 billion on new battery cell factory in the suburbs of Detroit. The Novi, Michigan, company plans to begin producing lithium iron phosphate cells and battery packs in 2024 at his 660,000-square-foot building, about 25 miles west of downtown Detroit.
ONE CEO Mujeeb Ijaz said the passage of the law clarifies the development of the US EV battery market ahead of investment decisions. car news.
“The acceleration has taken hold as we’ve seen our customers make clear and firm decisions,” he said.
The law, signed into law by President Joe Biden on August 16, contains provisions aimed at boosting the production of electric vehicles and batteries in the United States. new procurement requirements Vehicles qualify for the EV tax credit.
The law also creates a credit for battery cells worth $35 per kilowatt-hour of capacity, and battery packs are eligible for credits of up to $10 per kilowatt-hour of capacity. According to the Congressional Research ServiceIt also provides a 10% credit towards the production of important minerals.
“We are pleased to see the U.S. government’s focus on supply chain localization, with cell manufacturing being such a big part of the Inflation Control Act’s objectives,” Ijaz said.
Since the passage of the law, automakers and battery companies have made detailed investments in battery manufacturing projects. In addition to ONE’s plans, they include:
- China’s $2.4 billion EV battery cell facility Gochon in Big Rapids, Michigan.
- Honda Motor Co., Ltd. and South Korean battery manufacturer LG Energy Solutions invest $4.4 billion A new lithium-ion battery factory, location to be determined.
- Toyota Motor North America triple your investment North Carolina’s first battery plant from $1.3 billion to $3.8 billion.
- Canadian lithium-ion battery startup Electrovaya plans to invest $75 million to open a factory in western New York.
Granted, these companies’ multi-billion dollar investments didn’t come together in just a few weeks.
These projects may have been in development or under consideration for months or years before the law passed.
Still, the passage has accelerated projects and helped close deals that were previously in the works, said Jonathan Jerkink, a mobility analyst at research and data firm PitchBook.
“It’s a big boost,” he said.
The law aims to localize the EV battery supply chain, which relies heavily on China. According to consultant Roland Berger, China processes about 71% of the world’s lithium, about 65% of cobalt and 35% of nickel. This leaves US factory supply chains vulnerable to potential geopolitical risks, high transportation costs, and high carbon footprints.
Things may be starting to change. In September, North Carolina-based Piedmont Lithium said he spent $582 million to open a lithium hydroxide processing, refining and manufacturing facility in Tennessee, a key domestic source of EV battery materials. announced that it will provide
in the meantime, Mercedes-Benz and Volkswagen Sign Agreement Worked with the Canadian government to secure access to the country’s lithium, cobalt, nickel and graphite, and helped localize the supply chain of its US operations. To qualify for the IRA’s $7,500 EV tax credit, an increasing percentage of critical battery materials must be processed or extracted in the United States or in countries that have free trade agreements with the United States, such as Canada. I have.
The US “was behind the wheel” as China and other countries made big bets on making EV batteries, Geurkink said. But the IRA is helping change that, he said.
“There will be headwinds and collisions and some things will take longer than expected,” he said. “But ultimately, this is what matters.”
https://www.autonews.com/manufacturing/inflation-reduction-act-bears-fruit Inflation control laws bearing fruit