The Inflation Reduction Act (IRA) has ignited a significant surge in private investment across North America, with a whopping $245 billion being funneled into clean energy and technology manufacturing. This financial influx has catalyzed the development of approximately 34 battery factories that are either in the planning stages, under construction, or already operational within the United States. This wave of investment is reshaping the landscape of battery production, underscoring the nation's commitment to sustainable energy solutions.
General Motors (GM) has announced a strategic partnership with LG Chem, pledging a $19 billion investment over the next ten years. This collaboration aims to source critical materials from LG Chem's Tennessee plant, marking a significant step in securing the supply chain for electric vehicle (EV) batteries. Meanwhile, Tesla has made headlines by commencing construction on a lithium refinery in Texas in May 2023, positioning itself as one of the few U.S. automakers to refine its own lithium. This move underscores Tesla's commitment to vertical integration in battery production.
Panasonic has unveiled plans for what could become the world's largest EV battery plant—a $4 billion facility in Kansas. This factory will focus on manufacturing and supplying lithium-ion batteries to various EV manufacturers, reinforcing Panasonic's pivotal role in the battery supply chain. In a parallel development, Gotion announced its intention to establish a second battery manufacturing plant in Illinois as of September 2023, further expanding its footprint in the battery production sector.
Honda is retooling its engine plant in Anna, Ohio, to facilitate the production of casings for battery modules destined for Honda and Acura EVs produced in Ohio. This initiative highlights Honda's commitment to transitioning its production capabilities towards supporting the growing demand for EVs. Additionally, Daimler Truck and Paccar have joined forces with energy technology company Accelera and Chinese battery maker EVE Energy to construct a battery cell production plant, signifying a collaborative approach towards enhancing battery production capabilities.
The IRA's advanced manufacturing credits have played a crucial role in driving this wave of investment by offering producers payouts from the Treasury. However, the future of these incentives remains uncertain, posing potential challenges for ongoing and future projects. Amidst these developments, Northvolt has set an ambitious target to recycle half of the raw materials needed for cell production by 2030, demonstrating a commitment to sustainability in battery manufacturing.
The Ohio facility is set to produce both cells and modules, reinforcing its strategic importance in the battery supply chain. LG Energy Solutions has entered into a joint venture with Honda to supply "pouch type" battery cells to the North American market, further strengthening their collaboration in EV battery production. GM's efforts extend beyond LG Chem as it collaborates with other battery makers to produce batteries domestically, underscoring the industry's focus on localizing production.
Ford and SK On have secured a substantial $9.2 billion loan from the U.S. Department of Energy to finance the construction of three battery factories in Kentucky and Tennessee. This financial support underscores the government's commitment to bolstering domestic battery production capabilities. Moreover, Northvolt announced plans to open its first gigafactory in North America in late September 2023, marking a significant milestone in its expansion strategy.
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