Federal EV Tax Credit Is Prompting Massive US Investment

On a daily basis, it seems CarBuzz is reporting on the rapidly changing state of EVs. Whether it is Panasonic seeking to build massive new plants in the midwest to supply Tesla or gas-powered stalwarts like Dodge announcing the death of the V8, then dropping an insane new concept like the Dodge Charger Daytona EV. This market shift would be seismic enough had the US government not stepped things up even more with the Inflation Reduction Act, extending the $7,500 EV tax credit, but only to manufacturers whose vehicles are below a certain price threshold and, crucially, have batteries assembled in the USA. Because of that, not every EV makes the cut.

The move has prompted many automakers to start moving quickly. In a matter of weeks, several massive announcements have come from various automakers, each pertaining to battery production within North America.

The $7,500 tax credit from the Inflation Reduction Act excludes foreign automakers like VinFast, which has cut its prices by $7,500 to compensate. Rivian has taken similar measures to try and get its customers the best possible deal. Even larger OEMs like Hyundai and Kia are hopping mad they are excluded and are ready to put up a fight before the proposed Georgia EV battery plant comes online. But other large automakers like Toyota and Honda are all making big, expensive moves amounting to billions of dollars worth of investment.

Toyota just dropped an investment of another $2.5 billion into a future EV battery plant in North Carolina. It wasn't necessarily news since the plant had been announced last year with a 2025 completion date. The original plan for investment was just under $1.3 billion to supply 800,000 EV cars, SUVs, and trucks. But now Toyota is boasting that the new Toyota Battery Manufacturing plant will balloon to over 2,100 workers, more capacity, and a total investment just south of $4 billion.