Government incentives across the U.S., Canada and the European Union have spurred more private investment into an industry that is increasingly becoming more regionalized.
President Joe Biden’s Inflation Reduction Act, signed into law August 16, 2022, requires that the majority of the value of battery components be produced or assembled in North America in 2024 to qualify for half of the legislation’s EV tax credit, or $3,750.
To get the remaining half, battery makers will have to source most of the value of critical materials from the U.S. or a free trade agreement country.
In addition to spurring up domestic industry, the stipulations in the bill are designed to reduce reliance on China to supply and manufacture lithium-ion batteries.