President Biden’s goal for EV sales to reach 50% of the total vehicle sales by 2030 has driven billions of dollars in EV and battery production, creating a new “battery belt” or “gigafactories” in the US.
The Electrek article reports that to meet the demands for zero-emission cars and ensure an adequate supply of critical EV battery components, automakers around the globe have made plans to invest more than $40 billion.
Many automakers operating in the US are planning to significantly boost their EV production this decade and have already invested huge capital outlays. Meeting these manufacturing targets requires a vast number of batteries. A single EV can use hundreds to thousands of lithium-ion cells or batteries.
“Gigafactories” are emerging to meet the overwhelming demand for batteries. An article from the Federal Reserve Bank of Dallas explains a gigafactory. As its name implies, a Gigafactory means that its energy capacity exceeds one gigawatt-hour (GWh), or 1 billion watt-hours.
An EV battery pack contains hundreds or thousands of cells or batteries with 50–100 kilowatt hours (kWh) capacity. A gigafactory with 1 GWh capacity, operating at full capacity, can theoretically produce enough batteries to power 10,000 to 20,000 EVs.
According to the article, it is not until these recent years that the US’s investments in EVs have significantly grown. “US capacity additions were sporadic until recently when the pace of new announcements picked up. Six new facilities worth more than $5 billion were announced from 2018 to 2020. Since the start of 2021, more than 15 new facilities or expansions have been disclosed in the US, reflecting a potential investment of at least $40 billion. Several plants have also been announced in Canada.”
Data and estimates by Benchmark Mineral Intelligence, a data and market intelligence provider, say these new investments will boost lithium-ion battery production more than five times from 2021 to 2026. they project that by 2031, the US capacity will grow another 86%.
Electrek reports that the US government has approved some landmark investments to support the transition and ease a few bottlenecks holding the expansion.
The first is the Bipartisan Infrastructure Law signed in November 2021, which appropriated 89.9 billion to modernize public transit and another $7.5 billion to build an EV charging network across the US.
The CHIPS and Science Act was passed, providing $57.7 billion in investments to ensure a reliable domestic supply chain of semiconductors.
The Inflation Reduction Act, signed on 16 August, invests $369 billion to build a clean and sustainable economy, including a tax credit for EV buyers.
The Government investments and EV tax credits provided the necessary motivation for the US automakers to make it their ambition to supply everyone with an EV. The article notes that General Motors laid out plans to provide an “EV for everyone,” mirroring Tesla’s success of delivering a record 343,000 EVs in the 3rd quarter.
The article says that investments in EVs and batteries have also created over 642,000 manufacturing jobs in the country since 2021.
Johnson, P. (2022, 12 October). Over $40 billion in EV investments establishes new US ‘battery belt’ with 15 new plants or expansions. Electrek. Retrieved from https://electrek.co/2022/10/12/over-40-billion-in-ev-investments-establishes-new-us-battery-belt/
Plante, M. & Rindels, J. (2022, 11 October). Automakers’ Bold Plans for Electric Vehicles Spur US Battery Boom. Federal Reserve Bank of Dallas. Retrieved from https://www.dallasfed.org/research/economics/2022/1011.aspx