In the weeks since President Biden signed a comprehensive climate bill devised to spur investment in electric cars and clean energy, corporations have announced a series of big-ticket projects to produce the kind of technology the legislation aims to promote.
Toyota said it would invest an additional $2.5 billion in a factory in North Carolina to produce batteries for electric cars and hybrids. Honda and LG Energy Solution announced a joint venture to build a $4.4 billion battery factory at a location to be named.
Piedmont Lithium, a mining company, said it would build a plant in Tennessee to process lithium for batteries, helping to ease America’s dependence on Chinese refineries — a key aim of the Biden administration. First Solar, a big solar panel manufacturer, said it would invest up to $1.2 billion to build its fourth factory in the United States, probably somewhere in the Southeast, largely because of renewable energy incentives in the climate bill.
Some of the projects were in the works before the federal legislation passed, and before California added an extra push by banning sales of new gasoline cars by 2035. The big climate bill, the Inflation Reduction Act, is the latest in a series of policy moves and geopolitical developments that have pushed automakers and suppliers to invest in the United States. The trade war with China, disruption of supply chains by the pandemic, changes in free-trade agreements with Canada and Mexico, and the bipartisan infrastructure law last year have all had a powerful impact on where companies decide to build factories.
The timing of Toyota’s announcement, two weeks after Mr. Biden signed the climate law, was a coincidence, said Norm Bafunno, a senior vice president at Toyota Motor North America whose responsibilities include the North Carolina plant.
But he added that the legislation could be a “catalyst for our domestic battery production.” And he said Toyota was working hard to fulfill provisions of the bill that encourage companies to get raw materials and components for batteries from the United States and its trade allies.
At a time of economic uncertainty, the legislation gives companies more confidence that they can earn a return on their bets. The investments serve as affirmation of political leaders’ intent: to further accelerate America’s transition away from fossil fuels and to reduce dependence on foreign suppliers, especially those in China.