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The Inflation Reduction Act (IRA) isn’t even 10 days old, and it already appears to be inspiring foreign manufacturers to set up shop in the United States.
One of the main pillars of the groundbreaking legislation mandates that, in order to qualify for part of the electric vehicle tax credit, vehicles must be assembled in North America. Carmakers must also source the lion’s share of their batteries and necessary critical minerals from North America or from the U.S.’s free trade partners. The percentage of batteries and components that need to be North American increases over time, starting at 40% in 2023 and increasing by about 10% per year.
The goal of the legislation is to spur investment in U.S. manufacturing and production. If the early rumors are any indication, it seems to be working.
Korea IT News reported this week that battery giants like LG, Samsung, and SK One are planning to set up factories in the United States and change where they get materials for their batteries. Even before the IRA became law, Samsung had announced its intent to build a North American battery production facility. LG already has a plant in Holland, Michigan and plans for another in Arizona. But Korean battery makers are treating the IRA as an invitation to come and compete with the Chinese manufacturers that have dominated the market…
