Automakers Pour $38 Billion Into US Battery Plants to Fuel EV Race
Major automakers and suppliers invest over $38 billion to build massive battery factories across the United States. New federal tax credits accelerate this onshore manufacturing boom to shorten supply chains and secure EV production.
Automakers and battery suppliers invest more than $38 billion through 2026 to build massive battery factories across the United States. Companies like LG Energy, SK Innovation, Panasonic, and Samsung break ground on new facilities as they race to transition entirely to electric vehicles by the end of the decade. States like Kansas and North Carolina see record-breaking economic development projects, while Ford finalizes deals to bring battery production to Tennessee and Kentucky.
The recently passed Inflation Reduction Act accelerates this manufacturing boom by offering $30 billion in tax credits for battery production and mineral processing. Although these multiyear projects do not begin producing batteries until mid-decade, shortening the supply chain helps manufacturers control costs and reduce their dependence on foreign sources. Building a domestic battery industry also allows automakers to co-locate near their partners, which is a crucial advantage as the industry experiments with new battery chemistries.
Industry experts emphasize that staying close to the manufacturing process creates a vital feedback loop for innovation and reengineering. Arun Kumar of AlixPartners warns that falling behind in battery production means losing the market entirely, even if a company perfects its vehicle design and marketing. As part of this push, Panasonic plans a $4 billion plant in Kansas that surpasses its massive Gigafactory in Nevada to supply lithium-ion batteries to various EV makers.