The United States is in the midst of the biggest boom in clean energy manufacturing investments in history, spurred by laws like the bipartisan Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
These laws have leveraged billions of dollars in government support to drive private sector investments in clean energy supply chains across the country.
For several years, one of us, Jay Turner, and his students at Wellesley College have been tracking clean energy investments in the U.S. and sharing the data at The Big Green Machine website. That research shows that companies have announced 225 projects, totaling US$127 billion in investment, and more than 131,000 new jobs since the Inflation Reduction Act became law in 2022.
You may have seen news stories that said these projects are at risk of failure or significant delays. In August 2024, the Financial Times reported that 40% of more than 100 projects it evaluated were delayed. These included battery manufacturing, renewable energy projects and metals and hydrogen projects, as well as semiconductor manufacturing plants. More recently, The Information, which covers the technology industry, warned that 1 in 4 companies were walking away from government-supported grants for battery investments.
We checked up on all 23 battery cell factories announced or expanded since the Inflation Reduction Act was signed – almost all of them gigafactories, which are designed to produce over 1 gigawatt-hour of battery cell capacity. These factories have some of the largest employment potential of any project supported by the act.
We wanted to find out if the boom in U.S.-based clean energy manufacturing is about to go bust. What we have learned is mostly reassuring.
The biggest battery factories are on track
While the exact investment totals are challenging to pin down, our research shows that planned capital expenditures add up to $52 billion, which would support 490 gigawatt-hours of battery manufacturing capacity per year – enough to put roughly 5 million new electric vehicles on the road.
While not all 23 companies have announced their hiring plans, these facilities are expected to support nearly 30,000 new jobs, with projects mostly in the U.S. Southeast, Midwest and Southwest.
We wanted to know if these projects are on track or experiencing delays or problems.
To do that, we first reached out to local and state economic development agencies. In many instances, local and state tax incentives are supporting these projects. Where possible, we sought to confirm the project’s status through public data or formal announcements. In other instances, we looked for news stories to see if there is evidence of construction or hiring.
Of the 23 projects, our research shows that 13 appear to be on track, with total planned capital investments in excess of $40 billion and nearly 352 gigawatt-hours per year of capacity. Importantly, these include most of the biggest projects with the largest investments and projected production.
By our count, 77% of the total planned capital investment, 79% of the proposed jobs and 72% of the planned battery production are on track, which means that a project is likely to happen, roughly on time, and generally with their expected level of investment and employment.
Three projects are on the bubble. These have shown progress but experienced delays in construction or financing.
Five others show deeper signs of distress. We don’t yet have enough information to draw a conclusion on two projects.
An example of a project that is on track is Envision AESC’s battery factory in Florence, South Carolina. Its scale has been expanded twice since it was first announced in December 2022. It is now a $3 billion investment intended to manufacture 30 gigawatt-hours of batteries annually to supply BMW’s factory in Woodruff, South Carolina.
In early October 2024, South Carolina Secretary of Commerce Harry Lightsey conducted a tour of the Envision site and posted a video. Construction on the plant started in February 2024, and 850 workers are working six days a week to finish the 1.4 million-square-foot facility by August 2025. Once it goes into full production, the project is expected to employ 2,700 people.
2024 election could end or accelerate the boom
But a lot hinges on what happens in the upcoming elections.
Our data suggests the real risk that these projects and projects like them face isn’t slow demand for electric vehicles, as some people have suggested – in fact, demand continues to climb. Nor is it local opposition, which has slowed only a few projects.
The biggest risk is policy change. Many of these projects are counting on Advanced Manufacturing Tax Credits authorized by the Inflation Reduction Act through 2032.
On the campaign trail, Republicans up and down the ticket are promising to repeal key Biden-led legislation, including the Inflation Reduction Act, which includes grant funding and loans to support clean energy as well as tax incentives to support domestic manufacturing.
While full repeal of the act may be unlikely, an administration hostile to clean energy could divert its unspent funds to other purposes, slow the pace of grants or loans by slow-walking project approvals, or find other ways to make the tax incentives harder to get. While our research has focused on the battery industry, this concern extends to investments in wind and solar power too.
So, is the big boom in U.S.-based clean energy manufacturing about to go bust? Our data is optimistic, but the politics is uncertain.
Joshua Busby receives funding from the U.S. Department of Defense. He is affiliated with the Center for Climate and Security and the Chicago Council on Global Affairs.
James Morton Turner and Nathan Jensen do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
This article was originally published on The Conversation. Read the original article.
