In light of the new EV tax credit rules that were a part of a deal between Senators Chuck Schumer and Joe Manchin, EV automakers are now required to have the battery that goes inside the car, mainly manufactured and assembled in North America, which is stated in the Inflation Reduction Act passed earlier this summer. This has caused a mad scramble from top EV manufacturers to start building plants across the U.S to meet these requirements.
Big Announcement From Toyota
Most recently, Toyota announced a huge $2.5 billion investment into a planned battery plant in North Carolina on Wednesday. Originally, in 2021 Toyota announced the North Carolina plant with an initial $1.29 billion investment and was set to open in 2025, which was enough to produce 800,000 vehicles annually and produce 1,750 new jobs. Now, Toyota says with the $3.8 billion total investment it anticipates production capacity to greatly increase, as well as create an additional 350 new jobs.
However, this announcement from Toyota was just the latest in a surge of announcements to build new battery plants, with statements coming from other EV giants like Honda, LG, Panasonic, and more.
Other Big Announcements
On top of Toyota’s big announcement, Honda also announced a Joint investment with LG to construct a $4.4 billion battery factor in the U.S, location is still yet to be determined but Honda says the factory is set to open in 2025. They say the plant will supply batteries for both its Honda and Acura brands. Panasonic was one of the first major announcements in July when it stated a $4 billion factory in Kansas, the plant is slated to supply an additional 4680 cells to Tesla’s new Gigafactory in Austin, Texas. Panasonic also has floated the decision of opening their own plant in Oklahoma as well.
Wrap Up
While it is easy to assume these EV giants have been planning to build domestic battery plants in the future before, the new announcement of the Inflation Reduction Act makes it all the more necessary. These companies will be spending all the cash they have on getting these plants done quickly and efficiently to be able to take advantage of the new EV tax credit guidelines. If you ever have questions on the EV tax credit or how you may qualify for one when purchasing a new car, contact a trusted financial advisor for assistance.