Sunday, March 26

Large subsidies to electric car manufacturers in the US

Big companies like Tesla, Ford Motor Y General Motors have been hit by large subsidies for the manufacture of electric cars and batteries driven by the Biden administration, promoting their production according to Claire Bushey en Financial Times.

Public subsidies for the construction of electric vehicle and battery plants are skyrocketing across the country. Last year, governments approved about 2,000 million dollars in incentives, more than in the previous six years combined, according to a database compiled by Good Jobs First.

Michigan, the historic capital of the US auto industry, passed a $1.5 billion bill in December which expanded the state incentives, including for the production of electric vehicles. The legislation paid off last week when General Motors he said he would invest almost 7 billion dollars in the state to convert a factory to build electric vehicles and build another to make batteries.

“We proved the skeptics and the cynics wrong,” said the Michigan Governor Gretchen Whitmer, when announcing the investment. “We show everyone that we can compete for transformation projects. We can earn billions in investments and thousands of jobs.”

The Biden administration has sought to subsidize electric vehicle manufacturing across the country, proposing $3.5 billion in grants to convert car plants as part of his climate and social spending bill. But the legislation has hit a roadblock in Congress.

Meanwhile, states are moving forward with their own competing subsidies.

En Michigan, GM will receive incentives from $824 million for its latest battery and electric vehicle project, which, he said, would generate 4,000 new jobs and 1,000 jobs retained.

Mary Barra, CEO, said that “incentives were “very important” in GM’s decision to locate electric vehicle investments in Michigan because they would keep the company competitive on price. Given what the presence of the company will contribute to the state and municipalities. We see it as a win-win.”

GM’s announcement came four months after Ford I said I would spend $11 billion to build electric vehicle battery and assembly plants in the states of Tennessee y Kentucky. Ford, which like GM is based in Michigan, received $1.3 billion in government incentives for the projects. The company on Thursday reiterated its goal of manufacturing 600,000 electric vehicles per year by the end of 2023.

Critics worry that taxpayer money is being lavished on corporations, but supporters see the incentives as a down payment on a region’s future economic gains.

“The state of Michigan is spending between $160,000 and $210,000 for each job created or retained through GM’s new investments,” he said. Tim Bartik, senior economist at the WE Upjohn Institute for Employment Research. Ford’s latest projects in Kentucky and Tennessee are costing states as much as $60,000 and $100,000 per job, respectively.

“The average incentive agreement in the US could be around $50,000 per job,” Bartik noted. “However, it is not at all unusual for capital-intensive projects like this one to appear to receive incentives of more than $100,000 per job.”

The database maintained by Good Jobs First, a business and government watchdog group, showed that since 2002, Tesla, a pioneer in electric vehicles, has received the largest amount of subsidies with 2,500 million dollars.

Which companies have been the most benefited?

The database and published reports rank Ford as the next highest with $1.5 billion, followed by GM with $1.1 billion. Fourth on the list is electric truck startup Rivian Auto Rg-A, which will now receive more than $400 million of Georgia to build a new plant in the southern state.

Auto and truck plants have traditionally been attractive economic development projects because union jobs pay higher-than-average wages for jobs that typically don’t require a college degree. Plant profits multiplied as suppliers moved closer to their customers and hired workers.

“States are paying a little bit of money up front to get billions in long-term payments,” he said. Connor Morgan, spokesperson for the Zero Emissions Transport Association, a trade group for the emerging electric vehicle industry that includes motor manufacturers, battery manufacturers and chargers.

The largest subsidy to date occurred in 2014, when the state of Nevada granted $1.3 billion to Tesla to open your first “Gigafactory” of batteries in Storey County, outside of Reno.

“The factory has changed the economy of the area,” he said. Austin Osborne, Storey County Manager.

How has it affected employment?

With an average hourly wage of $25.78, the plant has provided a higher-paying job opportunity in a state where nearly a quarter of jobs are in tourism and gaming. “Tesla’s presence has attracted other companies, such as data centers owned by Tesla. Apple y Switch, based in Las Vegas,” Osborne said.

“You have to adapt to the world, and we have adapted to the world by creating an incentive package,” Osborne said. “It is simple capitalism. It’s the market.”

“The product in this case turns out to be a built environment and the services they need. Without being able to create a platform for these companies to succeed, they will go elsewhere and our community will not be able to survive,” Osborne concluded.