European Manufacturing Requires New Strategies Against Biden’s IRA
TL/DR –
Swiss solar-panel maker Meyer Burger Technology AG is set to move operations to the U.S. after shutting its factory in Germany, following a $220.5 million fundraising approved by shareholders. The company cites cheap Chinese competition and massive competitive disadvantages in Europe as reasons for the move. According to Bloomberg Intelligence analyst Alessio Mastrandrea, the firm could benefit from $1.4 billion in tax credits and see a sevenfold increase in sales by 2026 in the U.S., due to cheaper electricity, trade barriers on Chinese imports, and the Inflation Reduction Act’s incentives.
Meyer Burger to Shift Operations to US after Closing German Solar-Panel Plant
Swiss-based solar-panel producer, Meyer Burger Technology AG, has received shareholder approval for a $220.5 million fundraising initiative. This move is part of a strategy to relocate operations to the US following the shut down of its German factory. The company aims to survive the intense competition from cheap Chinese imports that has been detrimental to European manufacturers, causing job losses and business failures.
Meyer Burger believes the US offers a promising alternative to the vast competitive challenges in Europe. This is not the first instance of European factories being lured by the industrial-policy advantages in the US. Factors such as lower electricity costs, willingness to impose trade barriers on Chinese imports, and appealing incentives from the Inflation Reduction Act (IRA) are attractive to these companies.
The US’s tough stance on Chinese imports includes restrictions on solar panels made with forced labor, which has exacerbated a surplus in Europe. Meyer Burger is set to benefit greatly from the IRA’s incentives, potentially receiving up to $1.4 billion in tax credits. If their plan materializes, the company could see a remarkable sevenfold increase in sales by 2026, according to Bloomberg Intelligence analyst Alessio Mastrandrea.
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