‘Inflation Reduction Act’ Successful Due to Its Simplicity
TL/DR –
At a conference on mass battery production, market expert Simon Clark and investor Anthony Tse discussed the challenges Europe faces in the battery manufacturing sphere. Both mentioned the simplicity of North American and Chinese regulations and incentives, such as the US’s Inflation Reduction Act, as being beneficial for the industry. They also spoke of Europe’s need to simplify its processes, increase financial support, and encourage cooperation between government and private funding to compete effectively in battery manufacturing.
At the Benchmark Mineral Intelligence conference recently, Clark discussed the mass production of batteries, particularly in Europe. He detailed costs, such as US$35 per kWh for battery cell manufacturers and the potential for Europe to excel over North America in this sector.
He indicated that European companies like Northvolt and Freyr are considering expanding to North America due to the simplified business environment. He emphasized the need for Europe to adopt a similar approach to compete with China and North America.
Clark’s discussion was part of the ‘Creating a European hub for mid-stream capacity & next-generation battery development’ panel at Giga Europe. The European Commission’s executive VP, Maroš Šefčovič, stated the EU’s commitment to bolstering the bloc’s battery manufacturing ecosystem.
During the same session, investor Anthony Tse commented on the American adoption of China’s ‘carrot and stick approach’. He estimated the US’ Inflation Reduction Act’s cost to be around US$300 billion, potentially rising to as much as US$1 trillion.
Also discussed was the need for Europe to adopt a similar approach as the US and China, offering incentives for clean energy projects. The Inflation Reduction Act’s tax credits and grants for clean energy manufacturing were highlighted, as well as incentives for downstream clean energy projects, including energy storage.
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