Hyundai and BMW have joined a wave of overseas automakers looking to beef up their battery manufacturing here in the U.S., China’s car industry is making waves in Russia as other companies pull out, and Mercedes has opened its first EV-only dealership. All this and more in The Morning Shift for Thursday, December 8, 2022.
When it was passed by U.S. lawmakers earlier this year, the Inflation Reduction Act was praised for bringing tax breaks to thousands of electric vehicle buyers across the country. But, its stipulation that the cars must be assembled in the U.S. to qualify angered some, as did the news that future cars would need to use components assembled in the land of the free.
All this meant that overseas automakers have been scrambling to increase their manufacturing output Stateside. And, after Honda announced plans to beef up its battery production here in America, Hyundai and BMW have become the latest car companies to follow suit. Reuters reports:
Hyundai Motor Group and SK On said Thursday they will build a new battery manufacturing plant in the state of Georgia to supply the Korean automaker’s U.S. assembly plants.
Hyundai Motor Group and SK On, the lithium-ion battery subsidiary branch of SK Innovation, recently signed a memorandum of understanding (MOU) for a new EV battery manufacturing facility with details of the partnership still in development, the companies said.
BMW on the other hand has partnered with Japan-based manufacturer Envision AESC on its new U.S. plant. Automotive News reports that Envision will invest $810 million in a new South Carolina plant that will supply cells to BMW’s EV factories. Automotive News adds:
The planned 1.5-million-square-foot factory in Florence, S.C., will initially create 1,170 jobs and have an annual capacity of up to 30 gigawatt hours, the company said Tuesday. That volume can supply enough batteries for 300,000 EVs annually.
Inflation Reduction Act Adds $100 billion to U.S. EV Industry
If all these automakers investing in U.S. manufacturing isn’t enough for you, then here’s some more good news about the Inflation Reduction Act: it could encourage more than $100 billion of investment in U.S. battery manufacturing and development.
According to Automotive News, the emphasis on U.S.-made cars and components is forcing more and more automakers to invest in their facilities here in America. This could put the U.S. on a level footing with China, which spends vastly more on EV battery development and manufacturing. As per Automotive News:
The bill might even encourage U.S. battery makers and suppliers to develop and source batteries made from other materials besides lithium, which most EV batteries are made with today.
The U.S. only produces 1 percent of the world’s lithium, and many EV batteries are made from lithium sourced in China and Australia. The bill could end up directing $100 billion to the EV battery industry, putting it close to what China spends, Austin Devaney, chief commercial officer of North Carolina-based Piedmont Lithium, said.
Investment in U.S. battery manufacturing creates jobs and could lead to the development of more efficient cells, which could one day be used to reduce the emissions from other industries Stateside.
Tesla’s China Boss Brought in to Run Texas Gigafactory
Electric vehicle maker Tesla has been facing the same supply chain issues and production delays as most automakers are seeing this year, as well as its own special brand of quality control issues and recalls. Now, to try and fix some of these problems, boss Elon Musk has brought the head of the automaker’s China operation over to Texas to lead its factory.
According to Automotive News, Musk has appointed Tom Zhu to run the automaker’s Texas plant. Automotive News reports:
Tom Zhu, who joined Tesla in 2014 to help build its Supercharger network and most recently has been heading the automaker’s Asia Pacific operations, is in Austin this week and has brought some of his engineering team from China with him to assist in overseeing the ramp up of Giga Texas — a U.S. hub for the Model Y and future production of the Cybertruck — the people said, asking not to be identified because they are not authorized to speak publicly.
It’s not clear how long Zhu will be in Austin for, or whether he will retain his Asia responsibilities, the people said.
Zhu’s move to Texas comes as Tesla is looking to increase output here in America. The EV maker’s Texas factory went online earlier this year with a whole heap of showboating from Musk.
Mercedes Opened its First EV-Only Dealership
While Tesla might have been one of the first automakers to bring EVs to the mainstream, it’s facing stiff competition from legacy brands switching to battery power. Now, to show its faith in an all-electric future, Mercedes has opened the doors to its first EV-only dealership.
Automotive News reports that Mercedes has opened the EV-exclusive location in Japan, where it will sell its all-electric Mercedes-EQ branded models in Yokohama, south of Tokyo. According to the site:
Mercedes has rolled out five electric models since 2019 and “sees further growth in the electric vehicle market in Japan,” it said.
EVs have been slow to catch on in Japan, where domestic makers dominate the market. But foreign brands sold a record 2,357 EVs in November, surpassing a tenth of total imported car sales for the first time, according to the Japan Automobile Importers Association (JAIA).