U.S. EV and battery investments reached $120 billion in 2023 spurred by federal legislation
Energize Weekly, March 29, 2023
Electric vehicle (EV) and battery manufacturing investments in the U.S. surged by $120 billion in the last eight years with federal legislation spurring activity, according to a study by the Environmental Defense Fund (EDF).
EDF, a national environmental group, said investments and announced investments for EV passenger vehicles, vans, buses, and trucks, as well as EV batteries and battery components, translated into an estimated 143,000 jobs.
“This investment has been catalyzed by recent federal legislation,” the report said, including the 2021 Bipartisan Infrastructure Law, which contained more than $100 billion in spending supporting EVs and clean energy policy, and the 2022 Inflation Reduction Act (IRA), with $369 billion in spending on climate and energy policy.
Between 2015 and 2021, there was a total of $15.5 billion in investments. That figure more than doubled after the passage of the infrastructure act and grew another 37 percent after the passage of the IRA.
Of all the new EV jobs announced since 2015, 32 percent were in the last six months since the passage of the IRA and two-thirds came in the last 15 months.
The IRA includes three sets of requirements related to vehicle components and assembly for EVs to qualify for tax credits under the act, with the aim boosting domestic production:
- Final assembly must occur in North America.
- 50 percent of the value of battery components must be produced or manufactured in North America in 2023 with the percentage increasing annually.
- 40 percent of the value of critical minerals used for vehicles must be extracted or processed domestically or in a country with which the U.S. has a free trade agreement.
The U.S. currently accounts for only 10 percent of global EV assembly and 7 percent of battery production.
The bulk of investment during the past eight years, $65.3 billion, was in EV battery development, followed by $31.4 billion in passenger electric vehicles. Another $14.4 billion was investments in battery component projects and $9 billion in electric trucks, buses, and vans.
Those investments were focused on 10 states, which accounted for 86 percent of the dollars – led by Michigan and Tennessee, each with $16.6 billion in EV and battery financing.
Other prime states for EV and battery investments are Georgia ($15.2 billion), Nevada ($13 billion), Kentucky ($10.8 billion), South Carolina ($8.9 billion), and Ohio ($7.5 billion).
“Of the 4.4 million annual EV manufacturing capacity expected online in 2026, 62 percent is announced capacity and the remainder is estimated capacity,” the EDF report said. “Of the 11.5 million annual EV battery manufacturing capacity expected online in 2026, 82 percent is announced capacity and the remainder is estimated capacity.”