How Biden's climate law is fueling the U.S. battery boom
Separate new U.S. battery investments on Wednesday show powerful confidence in domestic market growth, which has climate law tailwinds.
Driving the news: The following events all happened on day alone.
- They also share something in common with the classic Spinal Tap meme, in that activity in the sector is being cranked to the max.
- Daimler Truck, Cummins and Paccar unveiled a joint venture that will invest $2-$3 billion in making cells for commercial vehicles and industrial uses.
- Big players, including BlackRock and Temasek, are pouring $542 million in new equity investments into battery materials firm Ascend Elements.
- Oman's wealth fund is investing an undisclosed sum in the U.S. battery firm Our Next Energy, per Oman's news agency and multiple reports.
Catch up fast: This week's announcements are just the latest in a long string of federally supported industry plans and investments — tens of billions worth — slated to make the U.S. a key battery player.
How it works: President Joe Biden's signature 2022 climate law has industrial policy provisions that push domestic development from multiple angles.
- There are subsidies for domestic manufacture of low-emissions energy equipment, including batteries.
- Meanwhile, consumer EV purchase subsidies are tethered to vehicles with batteries and materials sources domestically or from free-trade partners.
- In addition, the 2021 infrastructure helps as well. Ascend said it has received two grants totaling $480 million through that statute.
What they're saying: The 2022 law is "absolutely increasing demand for our sustainable engineered battery materials like cathode precursor (pCAM) and cathode active material (CAM), which are made from recycled lithium-ion batteries," Ascend spokesman Thomas Frey tells Axios via email.
- Cummins cited the manufacturing provisions, telling Axios the $35 per kilowatt-hour incentive "is expected to benefit customers by lowering the price of batteries."
The bottom line: Battery manufacturing growth was inevitable as the market grows, but the climate law is providing a charge.