{"id":32164,"date":"2022-09-24T09:03:51","date_gmt":"2022-09-24T13:03:51","guid":{"rendered":"http:\/\/autosector.com\/?p=32164"},"modified":"2022-09-24T09:03:51","modified_gmt":"2022-09-24T13:03:51","slug":"ira-battery-industry","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=32164","title":{"rendered":"Climate bill is good news for the U.S. battery industry | Autoblog"},"content":{"rendered":"

While President Joe Biden<\/a> was busy checking out the latest Corvette<\/a> with car executives at the Detroit auto show<\/a> last week, a decidedly different car-related event was occurring about 30 minutes away in another convention center: The Battery Show<\/a>.\u00a0<\/span><\/p>\n

It’s probably not surprising that you haven’t heard of the trade show, but it saw its biggest attendance yet: 15,000 people, up 64% from last year and almost 50% from pre-pandemic levels, according to organizers. One big factor behind all the interest was the <\/span>Inflation Reduction Act<\/a> that Biden signed into law last month. Battery upstarts are salivating over the goodies in the bill, particularly the tax credits for manufacturing components here in the United States.\u00a0<\/span><\/p>\n

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Jim Greenberger, the head of a trade association for battery<\/a> tech in North America,\u00a0said when he went to the welcome reception, he thought he might be in the wrong room because he didn\u2019t recognize anyone.<\/p>\n

\u201cThese are all people that suddenly are seeing an opportunity in an industry that\u2019s growing, where there\u2019s substantial government support and everybody\u2019s trying to figure out how they play in it,\u201d Greenberger said.<\/p>\n

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Kurt Kelty, a Tesla<\/a> and Panasonic veteran who\u2019s now an executive at battery startup Sila Nanotechnologies, said his company has seen more serious interest from automakers looking to procure battery materials domestically. Same for Mitra Chem, a Silicon Valley company aiming to produce lithium iron phosphate cathodes in the United States. There\u2019s a months-long wait list for samples, and the firm is already scouting sites for a new factory, CEO Vivas Kumar said.<\/p>\n

While U.S. startups are loving the carrots in the IRA, others are unhappy about the sticks. The content rules have already limited how many EVs are eligible for consumer tax credits — cars that were eligible three months ago no longer are. In particular, Korean trade officials have objected<\/a> to their U.S. counterparts on behalf of Hyundai<\/a>, Kia<\/a> and battery manufacturers who fear that Chinese-sourced materials and imported cars will put them at a disadvantage. China<\/a>\u2019s U.S. ambassador showed up at the Detroit show last week to warn against<\/a>\u00a0trying to cut the country out of the battery supply chain.<\/p>\n

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China\u2019s dominance of the space was never far from peoples\u2019 minds at the Battery Show. For all the gold-rush mentality and rhetoric about the power of American innovation, companies are anxious that if the U.S. goes too far in its bid to cut out China, their products could be vulnerable to retaliation.<\/p>\n

One panel debated whether the U.S. should create a \u201cwhite list<\/a>\u201d similar to what China adopted from 2015 through 2019. The government drafted a list of domestic battery manufacturers whose products were eligible for subsidies. This was key to the rise of Chinese champions like CATL and a blow to LG Chem and Samsung SDI, which had to repurpose newly built factories in China after being excluded.<\/p>\n

The idea was roundly criticized by the panel as un-American.<\/p>\n

Another option being\u00a0kicked around is a\u00a0\u201cbattery passport\u201d system similar to what\u2019s been\u00a0proposed<\/a>\u00a0in Europe. This\u00a0would involve setting up digital traceability for all the raw materials in a battery to ensure compliance with environmental and labor standards. It wouldn\u2019t explicitly ban Chinese suppliers, but if you exclude nickel from Indonesia or cobalt from the Democratic Republic of Congo, it could have that effect.<\/p>\n