The Biden administration allocated $1.7 billion to fund EV component production at 11 US plants, creating jobs and reducing dependence on China. Investments aim to meet 2030 electric vehicle sales goals, ensuring domestic competitiveness. Automakers increase battery and EV facility expansion nationwide.
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One goal of funding manufacturing plants in eight states was to break America’s dependence on China for batteries.
In July, the Biden administration announced it would fund $1.7 billion for electric vehicle component production at 11 manufacturing plants across the country. In doing so, the fed made progress toward both ending the nation's dependence on China for batteries and meeting its 2030 goal of making 50 percent of all new U.S. vehicle sales electric or hybrid models.
Eight plants currently shuttered or at-risk of closing are located in Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, Pennsylvania and Virginia.
The investments, reported CBS Detroit, are intended to help create and retain well-paying union jobs at the facilities.
"There is nothing harder to a manufacturing community than to lose jobs to foreign competition and a changing industry," said Jennifer M. Granholm, U.S. secretary of energy.
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Even as the nation's competitors invest heavily in EVs, these grants ensure that the U.S. automotive industry stays competitive, she said.
And "does it in the communities and with the workforce that have supported the auto industry for generations," added Granholm.
Biden's Inflation Reduction Act (IRA) earmarked the funds. The facilities, combined, would potentially create nearly 3,000 new jobs.
The DoE said the awards also would ensure some 15,000 union workers are retained at all of the 11 facilities. The facilities selected for funding will have to negotiate before they receive the awards, according to DoE.
This process will allow them to make a variety of products for the automotive supply chain. Production includes electric motorcycle and school bus parts, hybrid powertrains, heavy truck batteries and electric SUVs.
Back in 2019, at the start of the coronavirus pandemic, there were two battery factories in operation and two under construction in the United States. Today, according to tech publication TechCrunch, there are currently more than 30 domestic battery factories planned, under construction or operational.
The IRA, signed during the summer of 2022, helped ramp up the pace of both battery and EV component factories.
The Biden White House set a goal of breaking China's control of the supply and manufacture of lithium-ion batteries. Automakers were hesitant to repeat the chip shortage crisis that hampered manufacturing during the pandemic. As a result, China's grip on the market was loosened when vehicle manufacturers promised in 2021 to build EVs and batteries inside the United States.
"What has followed is a wave of automakers and battery makers, foreign and domestic, pledging to produce North American-made batteries before 2030," said TechCrunch.
What's in It for EV Producers, Buyers
The IRA has dangled an enticing carrot for both automakers and vehicle buyers.
TechCrunch reported drivers qualify for a $7,500 EV tax credit if they meet sourcing and production rules. The law requires 50 percent of the value of battery components be produced or assembled in North America this year to qualify for half the tax credit.
"To get the remaining half, 50 percent of the value of critical materials must be sourced from the U.S. or a free trade agreement country in 2024," said the tech publication "That percentage increases to 60 percent, 70 percent and 80 percent for vehicles produced in 2025, 2026 and 2027 and beyond, respectively."
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Manufacturing credits built into the IRA benefit producers with a payout from the fed treasury.
Under the law, production of battery cells qualifies for a credit of $35 per kilowatt-hour of capacity; battery module production, $10 per kilowatt-hour.
"Companies can also be reimbursed 10 percent of the costs incurred due to the production of electrode active materials," said TechCrunch.
The publication noted that auto and battery manufacturers have invested or promised approximately $112 billion in domestic cell and module manufacturing.
"Together, these companies promise to deliver an annual capacity of close to 1,200 gigawatt-hours before 2030, if each factory reaches maximum capacity."
Biden's IRA also has helped fuel $245 billion in clean energy and technology manufacturing, reports Atlas Public Policy's Clean Economy Tracker.
Charting Rise of EV Production Facilities
TechCrunch tracked a web of EV auto and battery maker investment since 2020. The publication updated its report in July.
In October 2022, BMW announced $1.7 billion for EV production operations in Spartanburg, S.C.
Of that, $700 million was allocated to the buildout of a battery assembly facility in nearby Woodruff, S.C.
The start of production is scheduled for the end of 2026, but BMW said it hasn't confirmed which EVs will be produced there.
The Spartanburg factory is currently the site of BMW's sports utility and crossover production facilities.
The automaker partnered with battery maker AESC to invest additional funds in a battery cell plant in Florence, S.C.
- Daimler, Paccar, Accelera, EVE Energy
Last September, Daimler Truck and Paccar formed a joint venture with energy technology company Accelera and Chinese battery maker EVE Energy.
The JV will build a battery cell production plant in Mississippi to support the adoption of EVs for medium- and heavy-duty commercial transportation.
Ford got in on the ground floor relatively early, forming a JV with South Korean battery maker SK in late 2021.
BlueOval SK has plans to build three battery plants in the United States, including two in Kentucky.
A third plant in Tennessee will be co-located with a Ford assembly plant producing a second-generation electric truck.
Ford and SK On secured a $9.2 billion loan from the DoE to help finance the construction of the three battery factories.
TechCrunch said while one of the Kentucky plants is scheduled to begin production in 2025, the second has been paused as Ford studies EV demand. Ford also is building a lithium-iron-phosphate plant in Michigan with technology licensed by Chinese battery maker CATL.
General Motors signed a JV with LG Chem in December 2022 with a $2.5 billion fed loan for three battery production plants.
GM also announced a battery plant JV with Samsung SDI this spring for construction in the United States.
The automaker also has partnered with startup SolidEnergy Systems to build a prototyping facility in Woburn, Mass.
TechCrunch reported GM's goal is to build a high-capacity, pre-production lithium-ion battery this year.
In August 2022, Honda formed a JV with LG Energy Solutions to supply pouch-type battery cells. An Ohio plant will produce cells and modules.
The automaker is securing battery resource recycling channels in agreements with businesses including Ascend Elements, Cirba Solutions and Posco Holdings.
Honda's engine plant in Anna, Ohio, is retooling to produce battery module casings that will power Honda and Acura EVs made in Ohio.
Last April, Hyundai and SK On set up a JV to build a $5 billion battery plant in Bartow County, Ga.
Soon after, Hyundai and LG Energy Solution formed a JV to build a battery cell factory near Savannah, Ga., according to TechCrunch.
This facility will support the production of 300,000 units of EVs annually once the plant reaches mass production.
Hyundai Mobis, Hyundai's parts and service arm, will assemble battery packs using cells from the plant. Hyundai Mobis announced plans in 2022 to build an Alabama battery module plant to supply 200,000-plus batteries annually to its parent company.
Mercedes-Benz opened a battery plant at its existing manufacturing facility in Alabama in 2022.
TechCrunch reported that the plant also became the production site for the automaker's fully electric EQS SUV. The Alabama facility also builds the EQE SUV. The Maybach EQS SUV is to follow this year.
Mercedes also is working with Sila, a next-gen battery materials company, to incorporate silicon anode battery chemistry as an option for buyers of the upcoming G-Class.
Sila replaces the graphite in a battery cell with silicon and is in the process of scaling up at its new Washington state facility.
A Stellantis and Samsung SDI joint venture launched construction of an EV battery facility in Indiana in March 2023, producing lithium-ion cells and modules.
The company, which includes brands Alfa Romeo, Chrysler, Jeep and Ram, announced last July a second battery factory with Samsung, to open in early 2027.
The automaker also formed a JV called NextStar Energy with LG in 2021 to build a North American factory with an annual capacity of 40 GWh.
Since beginning production at Gigafactory Nevada in 2017, Tesla has provided about 39 GWh capacity annually, according to Panasonic.
In January 2023 the automaker announced plans to invest billions more into the Nevada factory to produce batteries for 1.5 million light-duty vehicles annually.
The 4680 cells, designed by Tesla and revealed at Battery Day 2020, are meant to reduce battery cost by over 50 percent.
At the start of 2023, Tesla made plans to expand its Gigafactory Austin for battery cell testing and manufacture of cathode and drive units.
Toyota's planned battery plant in North Carolina, initially announced in 2021, will produce both cells and modules.
TechCrunch said with help from LG Energy, Toyota will build EV batteries out of its Michigan plant, and plans a battery lab at its R&D headquarters there. CEG
Lucy Perry
Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.
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