By David Lawder and Howard Schneider
(Reuters) – U.S. Treasury Secretary Janet Yellen travels to North Carolina on Thursday to tout hundreds of billions of dollars worth of new clean energy investments enabled by U.S. tax incentives as President Joe Biden struggles to win voter credit for their benefits.
Yellen will tour a Livent Corp facility in Bessemer City, North Carolina, that processes lithium hydroxide, a key ingredient in electric vehicle batteries. The plant near Charlotte is doubling its capacity due to increased demand for electric vehicles spurred by consumer tax credits of up $7,500 approved in the 2022 Inflation Reduction Act.
In excerpts of remarks to be delivered at the plant, Yellen said similar investments were taking place across the country, with $614 billion worth of clean energy investments and manufacturing projects announced since the Biden administration took office in 2021. These include $142 billion in EVs and batteries and $71 billion in clean energy manufacturing, and she attributed much of the investment to tax credits in the inflation reduction act.
“We’re seeing the emergence of a battery belt across the Midwest and South,” Yellen said, adding that this would bolster U.S. energy security reducing American dependence on China’s EV battery supply chain.
The Biden administration in coming days is expected to release new guidance on the levels of Chinese content that EV batteries can have and still qualify for IRA tax credits. The Livent plant processes lithium brine largely from Argentina and Canada.
Yellen said the bulk of investments spurred by the legislation was flowing to counties with below-average college graduation rates, providing good jobs “where they are most needed.”
STRONG GROWTH, LITTLE CREDIT
Increased investment in new manufacturing projects, machinery and warehouses, which also include new semiconductor plants, helped the U.S. economy to grow at a torrid 5.2% annual pace in the third quarter, defying predictions earlier this year that it was headed for a recession.
But Biden has struggled to win voter confidence in his handling of the economy, with polls earlier this month showing Republican frontrunner Donald Trump ahead in five of the six most important battleground states.
Voters remain deeply scarred by the higher living costs brought about by post-pandemic inflation, said Larry Sabato, director of the University of Virginia’s Center for Politics. It will take time for this to fade and for people to feel the benefits of higher wages, he added.
“People are hearing that things are getting much better, inflation is coming down and we’re not coming into a recession,” Sabato said. “But in their lives every week, when they go to the gas station or into the grocery store, they still perceive higher prices, and their minds are oriented to bad news. And people are going to blame the president.”
(Reporting by David Lawder and Howard Schneider; Editing by Chizu Nomiyama)
