$12 Billion for Battery Production from U.S. Government

The US government has made a total of 12 billion US dollars available to car manufacturers and suppliers in the form of grants and loans for the expansion of electromobility out of a total volume of 370 billion dollars. This funding is intended for retrofitting factories for the production of electric vehicles and the necessary components. This move, announced by U.S. Energy Secretary Jennifer Granholm, is seen as a response to criticism from automakers and unions who had lamented environmental regulations. The government wants to ensure that no jobs are jeopardized while transitioning to electromobility.

2024/03/15 - President Joe Biden emphasizes that the transition to clean energy can be an opportunity for automakers and workers. A portion of the financial resources comes from the "Inflation Reduction Act," a law aimed at reducing inflation and promoting clean technologies. Additional loans are provided by the Loans Program Office of the U.S. Department of Energy, and there are grants for American battery manufacturers. Some foreign electric vehicle models are excluded from the subsidies because they use batteries not manufactured in the U.S.

Local cell production is strongly encouraged. Subsidies of $30 per kWh for the cell and $15 for the battery pack are granted. However, these substantial subsidies are tied to strict requirements. The law sets minimum amounts of minerals that must be contained in the batteries for electric vehicles manufactured in the U.S. to be eligible for the tax credit. Initially, at least 40% of the critical minerals must come from U.S. mines or recycling plants or from mines in countries with free trade agreements with the U.S. This requirement increases by an additional 10% each calendar year to a maximum of 80% by 2027.

Kai-Uwe Wollenhaupt, President SVOLT Europe & Senior Vice President SVOLT Energy Technology: "This 'local-for-local' approach is becoming increasingly important worldwide – also to keep the CO₂ footprint as low as possible. We must also make every effort in Europe to establish local supply chains and to be able to source the required materials locally, as long as they are available."

In addition to adjustments in health and tax law, the "IRA" law represents the largest investment in combating climate change in U.S. history and includes a legal obligation for the country to reduce greenhouse gas emissions by 40% between 2005 and 2030.