Giga Factories and Battery Companies

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Sam Adham
Head of Battery Materials | CRUHead of Battery Materials | CRU
1h •

🔋🇺🇸🇨🇳 Battery costs are the Wealth of Nations.

For all the flaws and complexities we've pointed out in the US Inflation Reduction Act, one part is working as intended: the 45X Advanced Manufacturing Production Tax Credit.

To produce battery cells in the US, you get up to $35/kWh against the cost of labour and processing, both of which are otherwise systemically more expensive in the US compared to China.

Note that the cost of materials is excluded - this is clever as it avoids effectively subsidising a mine or cathode plant outside the US, and only counts the value added in that step domestically.

This is having a profound effect on company operating profits - see Panasonic/LG/SK reports.

It also means that, even with pessimistic parameters in our cost model, it can enable cost-competitiveness with that of the average Chinese counterpart.

Reach out to Aaron Wade - who is at #NAATBatt today - if you want to understand how battery costs are influences and how the CRU Battery Cost Model can help you.

#inflationreductionact #batterymanufacturing #batterymaterials

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