Automakers and OEMs are innovating at battery factories across the United States as they race to get into electric vehicles by the end of the decade.
Automakers and suppliers such as LG Energy, SK Innovation, Panasonic and Samsung are investing more than $38 billion through 2026 to boost battery production in the United States, according to AlixPartners. In July, Kansas and North Carolina each announced the biggest economic development projects in their history, and Ford finalized a deal to bring its battery production to Tennessee and Kentucky.
It’s just the beginning of a boom in onshore battery manufacturing: The Curbing Inflation Act, which includes tax credits to encourage domestic production of electric vehicles and batteries, offers manufacturers $30 billion in credits to speed up production of batteries and mineral processing, as well as solar panels and wind turbines, and $10 billion to build factories for electric vehicles and solar panels.
Multi-year plans already announced won’t start producing batteries for electric vehicles until the middle of the decade, but the shortening of the supply chain will ultimately help manufacturers control costs and reduce dependence on foreign sources for raw materials. The creation of a national battery industry also allows automakers to cluster close to partners, a crucial factor as the industry begins to experiment with different battery chemistries.
“That way you’re in this feedback loop that allows you to innovate and reorganize so that you always have a consistent edge and meet the market rather than dealing with multiple vendors in the chain,” Arun said. Kumar, Managing Director of AlixPartners’ automotive. and industrial practice.
“Imagine you figured out all the engineering, design, marketing and sales, but you didn’t have enough lithium-ion batteries to produce and sell these vehicles,” Kumar added. “If you’re two years behind, you’re pretty much lost, because then you’ll have a hard time capturing the market.”
Here is an overview of some of the major projects underway:
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