JVNE reported that the Bipartisan Infrastructure Law allocates $89.9 billion for public transit modernization and an additional $7.5 billion for constructing an electric vehicle charging network across the US. We will call this network the battery belt.
The Federal Reserve Bank of Dallas reportedly estimates that the total investment opportunity for these facilities is at least $40 billion. Except for one, every gigafactory has a capacity of at least 10 GWh. Meanwhile, the biggest will be able to produce more than 40 GWh.
According to the Federal Reserve, “Experts expect these new investments, as well as future ones, to significantly boost US production of lithium-ion batteries. (Chart 1, below) US capacity is expected to grow more than fivefold from 2021 to 2026, according to data and estimates by Benchmark Mineral Intelligence, a data and market intelligence provider. By 2031, US capacity is expected to expand another 86%.”
The report claims that traditional automakers are now making significant investments in electric vehicles.
- Ford plans to invest $50 billion in EV manufacture by 2026.
- GM will invest $35 billion by 2025.
- GM and LG are building three US gigafactories with the help of a $2.5 billion loan from the US Department of Energy (DOE).
The DOE estimates that the three US gigafactories will generate 5,100 operations positions and 6,000 well-paying construction jobs once fully operational.
It is also worth noting that most of the gigafactories are concentrated in the Midwest and South. They are relatively close to Tesla operations in Texas and California. This is largely influenced by the high cost of transporting large quantities of Li-ion batteries.
Furthermore, it is obviously advantageous from a supply chain perspective to locate the gigafactories in the same regions as the automakers.
The Fed further claimed, “A gigafactory with 1 GWh capacity operating at full capacity could theoretically produce enough batteries each year to power 10,000 to 20,000 EVs.”
Notably, the Battery Belt is the name given to the geographical area that roughly stretches from “Michigan to Tennessee to Georgia to western New York.” It is expected to deliver employment, technology, wealth, and hope as the nation shifts to sustainability.