Last year, Tesla's Model Y showed everyone that electric vehicles (EVs) can be popular. The midsize SUV became the world's best-selling car. However, the zero-tailpipe emission vehicle is still not as popular as some people might want it to be. Everyone has their reasons, but the US wants electric vehicles to succeed and banks on the industry behind them to create more jobs and economic opportunities. But Uncle Sam isn't just hoping; it's also helping.
Buying an electric vehicle can make a lot of sense for many Americans who have to commute or just need a car to travel someplace occasionally. There are many smart options out there. Take the humble single-motor Model 3 as an example. It qualifies for the full EV tax credit and other state or local incentives, which can bring the price to levels only seen before the global health crisis.
Besides an attractive initial acquisition cost, such a sedan can help the owner save money because it needs little maintenance and doesn't have to be a frequent gas station visitor. There are also other perks, such as a quieter ride, punchy torque, and access to the latest tech.
But the perfect vehicle does not exist. Out-of-warranty high-voltage battery replacements can cost a lot, insurance might be unexpectedly expensive, and simple repairs could break the bank. Moreover, there still aren't that many technicians who can easily apply long-lasting fixes if something goes wrong with an EV. Similarly, more often than not, if a component needs repairing, it gets replaced instead.
Some insurers, for example, prefer to total EVs after somewhat more serious fender benders or errors they can't diagnose because investigating and fixing them can cost more than reimbursing the owner for the vehicle's actual market value. It's unfortunate, but that's what happens when companies don't talk to each other and do proper research.
Photo: Tesla
If you live in an area prone to accidents and have a new car that's financed, it might be a good idea to pay for GAP insurance. Just make sure you shop around and don't get it from a dealer. Some middlemen can be scammy.
Tumultuous, but for a very good reason
It's a confusing time for the automotive industry, which is problematic for tens of thousands of employees and millions of customers. Right now, some important automakers are delaying their total electrification plans. That has a domino effect because suppliers must also adjust their plans. Northvolt for example, lost a $2 billion contract with BMW, which affected its operations and hurt its reputation.
Everyone knows how ruthless business can be. Still, it's rather unfortunate that behind those canceled deals and unfavorable numbers hides the suffering of real people who may lose their jobs.
Fortunately, US lawmakers and government officials didn't forget that electric vehicles aren't only about a better driving experience or short-term profits. The popular zero-tailpipe emission propulsion solution, the battery-electric vehicle, is supposed to help slow global warming down. After all, the main selling point of the Model S back in the day used to be about joining the green side of the automotive realm, where CO2 emissions and brake dust are minimized. Remember how everyone used to talk about carbon footprint, a concept coined by British Petroleum (BP)?
Photo: General Motors on Facebook
Uncle Sam may be offering new car buyers $7,500 if they get an eligible EV and qualify themselves for the federal perk, but it's also handing automotive companies a lot of cash if they do what's needed to help the US champion the transition to cleaner powertrains. You may know this already, but battery production is subsidized in the US.
The winners will bear quite the responsibility
In addition to those clear-cut incentives helping automakers steer their ships toward EV production, the current administration is also investing in establishing the supply chains China already has. And it's doing it right. All the projects are seriously vetted, and the entities that get the money must create union jobs that pay well. Moreover, the $3 billion in federal grants and loans is expected to attract $16 billion from the private sector.
Essentially, the government wants to give the green sector of the economy a serious reason to continue innovating and putting in the work. That's why Uncle Sam is investing in upgrading critical mineral mining equipment. The money will also go into processing plants, battery components, battery pack manufacturing, and recycling. The Department of Energy is trying to create an integrated ecosystem that takes full advantage of all the metals needed in batteries. Some of the projects even promised to be carbon neutral, meaning they won't generate any new greenhouse gas emissions (GHGs).
Photo: ABC News on YouTube
That should result in around 12,000 new jobs and more affordable high-voltage batteries for Americans who want to become more energy-independent or want small solar installations for their EVs. Of course, a shorter supply chain for high-voltage energy storage units will also help automakers lower their costs and, in turn, offer cheaper EVs to customers.
If everything goes right, these investments and renewable power generation should help the US and North America reduce their reliance on oil derivatives. The price of gas is controlled by the Organization of the Petroleum Exporting Countries (OPEC), of which the US is not a member. There are other factors at play, too. However, black gold is a global commodity. Even though America is the world's largest oil producer, it still can't detach itself from what traders are doing. Electricity, on the other hand, is easier to manage within borders. The only variable remains the grid.
Meeting (some of) the winners
Albemarle is well-known to investors because it has been consistently paying quarterly dividends. The company should receive nearly $150 million for separating material and producing cathodes (the negatively charged electrode in a battery) in North Carolina. When the project is fully operational, Albemarle should be able to manufacture battery-grade lithium to power over 700,000 EVs.
Anovion plans to do the same but in Alabama. It stands to get $117 million.
Ascend Elements proposed recycling spent lithium-ion batteries and producing cathode materials and metal salts. It should receive over $316 million to establish its plant in Kentucky. The company believes that the project will generate over $4 billion in total economic impact in the first 10 years of operation. Ascend Elements applied separately for cathode manufacturing funds, and it might get an extra $164 million for the same facility.
Photo: ABC News on YouTube
Group14 Tech should soon receive $100 million to manufacture a silicon-carbon composite that separates the graphite in lithium-ion batteries. This anode material is supposed to make battery recycling easier and cheaper, which should benefit anyone. The facility already exists in Washington State; it just needs some upgrading.
EV drivers might know what lithium iron phosphate (LFP) batteries are. ICL-IP America wants to make the cathode powder for this type of high-voltage energy storage unit, and it's supposed to receive over $197 million for extending its existing plant in Missouri.
Solvay Specialty Polymers is also very close to the finish line. It stands to obtain over $178 million to create battery-grade polyvinylidene fluoride (a cathode binder and separator coating material) at an existing facility in Georgia.
There are more companies waiting in line for federal funds, but these are the ones getting most of the cash, which should hit their bank accounts very soon. The federal government will continue spending money on new initiatives, though!
The funds haven't been released to the abovementioned awardees yet. The Department of Energy is finalizing negotiations with every party to ensure that these investments' local and national impact won't drastically diminish or disappear once the money is in the companies' bank accounts.
Batteries are central to our everyday lives!
We’re investing over $3B to support domestic battery production. This is a crucial step toward bolstering America’s battery supply chain, enhancing energy security, and supporting the nation’s transition to a clean energy economy. https://t.co/nnzdBHOMiS
Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one. Full profile
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