Inflation Reduction Act Drives $92 Billion Investment In EV Production, 84,000 Jobs In USA
The Inflation Reduction Act has been an enormous stimulus for the electric vehicle sector in the US. It is underrated and under-acknowledged for how it has brought manufacturing and mining jobs to the United States, not to mention retained many. People may think that EV sales and production in the US would grow naturally because of the market situation and the technology being ripe. But that’s not everything. The US was being left behind big time by Europe and China. We were far behind the curve on EV adoption rates, EV production, and EV battery production. The Inflation Reduction Act flipped the script here.
Well, honestly, it’s a combination of policies and new legislation that have combined for max effect in the current auto era. The Inflation Reduction Act is the biggest of the pile, but there’s also the Infrastructure Investment and Jobs Act, the Bipartisan Infrastructure Law, and the CHIPS and Science Act.
Thankfully, we now have a study that has tried to quantify how much all of this national policy as well as industry trends have added up to stimulate the EV revolution in the land of stars and stripes. And, naturally, the research has found huge economic boons for the USA. The new study from the Center for American Progress found that the Inflation Reduction Act (IRA), the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act have helped to stimulate more than $92 billion in investment in the EV production, battery, and critical mineral industries. These policies and investments have created an estimated 84,000+ jobs — so far.
The Inflation Reduction Act is the biggest reshoring and pro-manufacturing legislation the United States has seen in … well … forever. It is doing heavy lifting, often silently, to keep the US in the global competition to lead the auto industry of the future, and increasingly of the present.
“The Inflation Reduction Act’s strategic and plentiful incentives are essential to spurring EV and battery manufacturing. By investing and creating a strong American EV manufacturing sector, these policies and incentives are essential to breaking China’s dominance of critical mineral and battery component supply chains,” says Leo Banks, research associate for Domestic Climate Policy at the Center for American Progress and author of the issue brief.
“Investment in new manufacturing capacity for zero-emissions vehicles, batteries, and critical minerals have jumped more than 250 percent, climbing from $14 billion in the year before Inflation Reduction Act’s passage to $51 billion in the year since its passage, according to the Clean Investment Monitor,” the Center for American Progress (CAP) adds.
“EVs are the inevitable future of transportation, already constituting 14 percent of global vehicle sales in 2022—a figure that may hit 18 percent by the end of 2023.5 If American automakers fail to invest in EV innovation, this major pillar of U.S. economic and industrial strength will be overtaken by foreign competitors who are aggressively pursuing the EV revolution.6 The Inflation Reduction Act offers U.S. automakers a path of continued global relevance, and, fortunately, it seems to be working.” Indeed. We’ve been saying that here on CleanTechnica for nearly a decade. It’s just nice to finally have strong legislation working for the US economy in this regard.
“The Inflation Reduction Act and the IIJA collectively provide more than a dozen incentives and policy levers to move the United States forward on EVs and clean transportation. By simultaneously supporting the entire EV ecosystem — including manufacturing, adoption, and charging — these incentives advance a far more robust EV transition than any single tax credit, grant, or loan would on its own, and they help onshore the jobs in the growing EV market.” Here’s a useful chart on the many arms of stimulus provided by this legislation:
View the different elements highlighted there in much more detail on the CAP website.
On this Thanksgiving, without a doubt, one of the biggest things I’m thankful for as an American, economically speaking, is the Inflation Reduction Act and the complementary legislation that has made the US a major player in the EV industry again. Yes, we already had global leader Tesla, but we needed much more than that, and now we’re getting it. And Tesla has gotten a massive boost from the Inflation Reduction Act as well!
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