The shift of battery production for electric vehicles (EVs) back to the U.S. began subtly during the COVID-19 pandemic but quickly gained momentum.
In 2019, only two battery plants were operational in the United States, with two more in the works. Fast forward to today, and approximately 34 battery facilities are either in the planning stage, under construction, or already operational across the nation.
The Inflation Reduction Act (IRA), signed into law by former U.S. President Joe Biden on August 16, 2022, may not have been the original spark igniting this renaissance in domestic battery manufacturing. However, it unquestionably acted as a significant catalyst, propelling the speed of new factory initiatives and intensifying competition in climate technology with the European Union.
Two and a half years later, we continue to analyze the implications of this development, despite the uncertain future of the IRA itself.
In January 2025, former President Donald Trump issued an order to halt the distribution of IRA funds. Nevertheless, many of those resources had already been allocated to manufacturers, and the momentum of private sector investment in clean energy remains unabated.
Regardless of Trump’s stance on clean energy, the necessity for the U.S. to maintain its dominance over the battery supply chain is unmistakable, particularly given Trump’s 10% tariffs on imports from China. Automakers are acutely aware of the complications that arose during the semiconductor shortage, which adversely impacted production during the pandemic, and they are keen on avoiding a repeat of that scenario.
As a result, a flood of both domestic and foreign automakers and battery manufacturers are expressing commitments to establish North American battery production ahead of the 2030 deadline. (For detailed plans from each automaker, click here, and for battery manufacturers’ strategies, click here.)
Incentives of the IRA
Why is there such a surge of investment in onshoring EV battery production? One reason is the incentives embedded in the IRA designed for automakers and consumers, aimed at reducing the reliance on China for battery production while striving to achieve Biden’s target of having 50% of all new cars sold in the U.S. be electric or hybrid by 2030. Despite Trump’s withdrawal from the IRA, qualifying electric vehicles remain eligible for a full $7,500 tax credit if they adhere to specific sourcing and manufacturing criteria.
For 2024, the IRA stipulates that 60% of the value of battery components must be produced or assembled in North America to qualify for half of the tax credit ($3,750). This percentage increases to 100% by 2029. To access the remaining half of the credit, 50% of the value of vital materials must originate from the U.S. or a country with a free trade agreement in 2024, escalating to 60%, 70%, and 80% for vehicles manufactured in 2025, 2026, and 2027 and onward, respectively.
While advanced manufacturing credits under the IRA are likely at risk of being phased out, it’s essential to understand their implications over the past few years. According to Section 45X, producing battery cells qualifies for a credit of $35 per kilowatt-hour of capacity, with battery modules providing a $10 per kilowatt-hour credit. (Battery cells store energy chemically and are organized into modules, while battery packs can consist of either cells or modules.)
Companies may also claim 10% reimbursement for costs incurred from producing electrode active materials, which include cathodes and anodes. The cathode retains lithium during battery discharge, while the anode does so during charging. Both components form a battery cell and can comprise materials such as graphite, silicon, zinc, aluminum, magnesium, nickel, and cobalt.
Automakers and battery manufacturers have collectively committed to invest around $112 billion in establishing domestic cell and module manufacturing. If all factories operate at peak capacity, these establishments could collectively provide close to 1,200 gigawatt-hours of annual battery output before 2030, sufficient for powering roughly 18 million EVs, based on Tesla’s estimates that indicate about 100 GWh can energize around 1.5 million EVs.
Beyond the battery sector, the IRA has spurred a total of $245 billion in private investments in clean energy and technology manufacturing, as reported by Atlas Public Policy’s Clean Economy Tracker.
Investment trends for battery production in the U.S. and Canada are continuously evolving, prompting us to monitor these commitments.
Investment by Automakers in Domestic Battery Production
TechCrunch has created an interactive map detailing the location of each battery factory, along with essential information such as planned capacity. For further information and context, scroll down to learn about each manufacturer’s ongoing or planned battery facilities. Alternatively, you can click on a specific location on the map for a pop-up with more insights.
Note: The factories listed here are engaged in the production of battery cells and modules. We have not included data on the production of battery materials, so this list is not exhaustive regarding all production related to creating EV batteries in North America.
Where are EV batteries being produced in North America?
Hover over the green dots for additional information about each facility.
This article was initially published on August 16, 2023, and received its last update on February 6, 2025.
BMW
In October 2022, BMW declared a $1.7 billion investment in the U.S., aiming to prepare its Spartanburg, South Carolina, facility for electric vehicle production. Of this budget, $700 million is earmarked for establishing a battery assembly facility in nearby Woodruff. The company informed TechCrunch that production is set to commence by the end of 2026, although it hasn’t confirmed which electric vehicles will roll off the assembly lines. Currently, BMW manufactures its SUVs and crossovers at the Spartanburg site, including models like the X3, X4, X5, X6, X7, and XM.
Furthermore, BMW joined forces with battery manufacturer AESC (formerly known as Envision AESC) to invest additional capital into a battery cell facility in Florence, South Carolina (more information in the AESC section). The Florence plant will produce BMW’s new sixth-generation round lithium-ion battery cells designated for EVs manufactured at the Spartanburg plant. Construction for both the Woodruff and Florence sites began in June 2024.
This revision maintains the original content’s meaning while offering a unique articulation. If further sections or adjustments are needed, please let me know!
Compiled by Techarena.au.
Fanpage: TechArena.au
Watch more about AI – Artificial Intelligence
