US IRA sets framework for car battery investment; manufacturers urged to secure battery materials
Stellantis, which lamented that ‘the IRA has fundamentally changed the terrain for battery manufacturing in North America’, decided to produce batteries in Ontario, Canada, and therefore did not get a US IRA subsidy, instead drawing an additional subsidy from the Canadian government.
As well as a $7,500 BEV purchase subsidy, the IRA also has a subsidy scheme for battery production. The amount is a whopping $45 per KWh, and the impact on the global automotive industry, which is investing in BEVs, is enormous.
President Biden’s grandiose attempt to have half of all car sales in 2030 be EVs is being translated into concrete business plans by OEMs. Based on their respective strategies, the companies are developing cost-competitive products and production plans to ensure that the new BEVs are accepted by customers.
As IRA subsidies play a major role in the cost competitiveness of new BEVs, companies are busy producing battery cells domestically and securing materials to meet the regulations, and the most important issue is now how to procure materials in a cost competitive manner without depending on China.
This section provides a summary of the latest developments in OEM trends and government policies in various countries and a strategic analysis of these trends.