Federal climate bill to boost local EV investment
Welcome to the new Battery Belt — a string of Rust Belt cities transitioning to an electric vehicle future along with areas of the Deep South.
Driving the news: The climate bill President Biden signed into law last week opens up tens of billions of dollars in subsidies for high-tech EV plants, Axios' Joann Muller reports.
State of play: One of the state's partners in expanding EV infrastructure, San Francisco-based Volta, will be at the Detroit Pistons Performance Center today along with Lt. Gov. Garlin Gilchrist to spotlight new charger sites and efforts to help cities apply for this new federal funding.
Why it matters: The package is a massive down payment on addressing climate change and moving toward energy independence as the U.S. races to build a domestic supply chain for batteries and other critical materials.
- It could also be a major economic jolt for the large swath of the country some are now calling the Battery Belt, where post-industrial cities are hoping to ride the next wave of wide scale manufacturing in the U.S.
Zoom in: Ford, General Motors and Stellantis are already pouring billions into new EV and battery manufacturing in the region, including facilities in Dearborn, Hamtramck and Windsor, Ontario.
- Now automakers and battery suppliers are eligible for billions of dollars in federal loans and tax credits, helping to offset those costs and spur additional investments.
The optimists' view: By incentivizing a domestic EV component supply chain, the bill will help reduce automakers' costs — and they'll pass those savings along to consumers in the form of cheaper electric cars.
Yes, but: Increased demand for cheaper EVs could be fleeting, U of M professor Erik Gordon tells Axios.
- "Are you creating artificial demand today, which comes back and bites you tomorrow when people want to sell the car without a subsidy?" says Gordon, whose expertise includes transportation and technology commercialization.
Of note: The average new electric car cost was $66,000 in June.
More Detroit stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios Detroit.