Climate Denial Crock of the Week

Above, interview clip from The EV Report with Mujib Ijaz, founder of Our Next Energy, which recently announced a 1.6 Billion dollar EV battery production plant in Southeast Michigan, to manufacture a Lithium Iron Phosphate battery they claim will provide 700 mile range for consumer EVs.

Electrek:

After President Biden signed the new climate bill, automakers are scrambling to establish their position. 

Here are a few of the biggest updates since the Inflaton Reduction Act was passed.

• Hyundai, which was already planning to build EVs in the US, is reportedly considering speeding up the timeline and may start construction on its dedicated EV plant in Georgia later this year rather than waiting until 2023.
• Volkswagen and Mercedes-Benz signed agreements to source EV battery raw materials from Canada. German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau were both in attendance at the historic signing.
• Mercedes-Benz said it will be sourcing 10,000 tons of lithium from Rock Tech, a Canadian mining company. 
• Honda is forming a joint venture with LG Energy. The JV is investing $4.4 billion into a new US battery plant that expects a 40 GWh annual capacity. 

And this is just the start. Volkswagen, Mercedes-Benz, Hyundai, and Honda are all looking to grab their share of the lucrative US EV market.

Protocol:

Part of the Inflation Reduction Act’s $7,500 electric vehicle tax credit is tied to manufacturing battery components in North America and sourcing critical minerals from there. That initially riled up some automakers, who claimed it would be an undue burden. 

Fast forward a few months, and companies are moving almost in lockstep to bring large-scale operations to the U.S. in anticipation of car buyers looking to take advantage of these EV incentives.

So far in 2022, automakers have announced more than $13 billion in domestic EV manufacturing investments and $24 billion in batteries. That’s triple the amount invested in domestic EV manufacturing in 2020 and 28 times the investment in batteries, according to a White House analysis. 

The U.S. has played a negligible role in the making of EVs and the mining, processing, and production of their components, Sara Baldwin, the director of Energy Innovation’s electrification program, said. Meanwhile, countries like China have long been ramping up for the EV expansion, dominating manufacturing and securing not only the intellectual property to serve the market, but also the mining operations critical to their growth.

“We weren’t prepared for this or planning for this,” Baldwin said of the U.S. 

The IRA is helping the country play catch-up.

It’s undeniable we’re already starting to see the first wave of EV and battery manufacturing onshoring. “This is just the beginning of a long-term shift that’s going to take place,” said Rachel Patterson, a policy lead at climate advocacy group Evergreen Action. Some state-level policies like California banning the sale of gas-powered cars by 2035 could help spread EV adoption even further while still other states offer incentives for manufacturers to set up shop. That could convince more automakers to build plants and source minerals from the U.S.

Here’s a running list of all the companies investing in the American EV market.

Tesla: The EV maker is reportedly partnering with Panasonic on a $4 billion EV battery plant, set to be built in Oklahoma. The two companies already jointly operate a battery factory in Nevada and had previously announced in July a plan to build a separate $4 billion EV battery factory in Kansas. Both Kansas and Oklahoma have incentive packages in place that would attract the corporate investment. The Wall Street Journal, which broke the potential Oklahoma factory news, also reported that Tesla is pausing its German expansion plans to potentially shift its battery cell-making operations to the U.S. in order to qualify for IRA tax breaks. Sources also told Electrek that the company is finally planning on expanding its Nevada gigafactory to be used for battery cell manufacturing.

Kia and Hyundai: Kia is planning on moving some of its EV assembly to the U.S. by 2024, according to South Korean news sources. (Its flagship EV is currently built in South Korea.) The South Korean automaker and its parent company Hyundaicurrently have the second-highest market share for EVs in the U.S., and it looks like they want to keep it that way. Hyundai had already made plans earlier in the year to invest $5.5 billion to build EV and battery manufacturing plants in Georgia, near existing Hyundai and Kia plants. At the time, the company didn’t expect to start production until 2025, but it looks like it’s now moving those plans forward by a year in light of the IRA.

Honda: The Japanese automaker and South Korean battery maker LG Energy Solution announced that they’re building a $4.4 billion EV battery plant in the U.S. in late August. They’re targeting production for the end of 2025. Sources told the Wall Street Journal that the plant will be in Ohio, where Honda has an existing auto plant. These batteries will be used exclusively to power Honda and Acura EVs made in North America. 

Toyota: The Japanese automaker announced an additional $2.5 billion investment into its battery manufacturing plant in North Carolina, more than doubling its prior commitment of $1.29 billion, announced in December. Production is scheduled to begin in 2025, and batteries produced would be used in both hybrids and EVs. The plant is expected to employ 2,100 people, and the announcement came two days after Honda’s announcement.

General Motors: The largest auto company in the U.S. is investing $760 million in its existing Toledo plant to make drive units for its EVs. The plant will be the company’s first powertrain or propulsion-related factory to be converted into an EV-component maker. GM also said it’s investing $491 million in an Indiana plant to make parts for future vehicles, including EVs. 

Ford: The American automaker announced plans to invest $11.4 billion in two EV hubs, one in Tennessee and another in Kentucky. The $5.6 billion complex in Tennessee will vertically integrate battery manufacturing with the assembly of the company’s electric F-Series trucks. Through a joint venture with South Korean battery business SK Innovation, $5.8 billion will go towards building two Kentucky battery plants, which will supply batteries to Ford and Lincoln’s North American EVs. The company plans on investing more than $30 billion in EVs through 2025. 

Gotion High Tech: Chinese battery maker Gotion is opening a new $2.36 billion plant in Michigan. Gov. Gretchen Whitmer called it the “biggest ever economic development project in Northern Michigan.” Like other states that successfully courted battery makers, Michigan granted the company plenty of tax incentives to build the plant ($715 million to be specific). The facility is set to produce 150,000 tons of cathode material and 50,000 tons of anode material a year once operational.

Our Next Energy: The Michigan-based startup announced a $1.6 billion investment in a new battery cell plant that will be operating at full capacity by the end of 2027. This will be the company’s first cell factory, according to founder and CEO Mujeeb Ijaz. The company is also starting a workforce development program meant to retrain Michiganders for green jobs.

Piedmont Lithium: The North Carolina-based lithium producer announced an approximately $600 million investment in a new lithium hydroxide production plant in Tennessee. The company said production is slated to start in 2025, and it claims the plant will be the largest lithium hydroxide processing facility in the U.S.