In the two weeks since the signing of the Inflation Reduction Act (IRA), the biggest climate bill in US history, foreign companies have announced blockbuster investments in US battery plants. .
The investment is likely spurred by the promise of attractive tax credits offered under the IRA to electric vehicle manufacturers. Meet sourcing needs.. To be eligible for these credits, at least 40% of the primary minerals used in EV batteries must be sourced from the US or an independent trading partner by 2024. This limit will increase to 80% by 2027.
Toyota, Honda and LG want to make batteries in the US.
Tokyo-listed carmaker Toyota said today (August 31) that it 5.3 billion dollars invested in Japan and the US To increase EV battery production. About half of that money will go toward a new battery plant in North Carolina.
Battery production is expected to begin between 2024 and 2026. According to Toyota. Once its U.S. plant is online and fully operational, the company aims to produce enough lithium-ion batteries there. Power 1.2 million EVs per year.
The news from Toyota comes just a day after Japanese automaker Honda and South Korea’s LG Energy Solutions. pledged an investment of $4.4 billion. To jointly build an EV battery plant in the US. The companies did not disclose the location, but Honda currently has major manufacturing operations in Ohio, Alabama and Indiana.
And last week, The Wall Street Journal reported. that Japan’s Panasonic – which supplies batteries for Tesla’s cars – is planning a $4 billion battery plant in the US. That’s on top of another battery factory, slated for Kansas to invest in roughly the same volume the firm had. Announced in July.
Will China make batteries in the US?
Right now, given the limited mineral processing and battery production capacity outside of China, most EVs don’t qualify for IRA tax credits. Simon Moores, CEO of consultancy Benchmark Mineral Intelligence, has called The 40% minimum sourcing requirement will be pushed back from 2024 to 2028 to give the US battery supply chain enough time to take shape and factor in the tax incentive.
Still, as major Japanese and South Korean firms unveil plans to invest in battery production in the U.S., there is one notable exception: CATL, the Chinese battery giant.
The Shenzhen-listed firm rApparently the announcement was delayed Its own multibillion-dollar North American battery plant has heightened geopolitical tensions between the US and China, particularly after US House Speaker Nancy Pelosi’s visit to Taiwan earlier this month. However, Reuters reported that CATL is Press forward With its long-planned North American investments.