Backing domestic production marks a break with decades of federal economic policy that treated low prices as the primary goal, and imports as the best way to achieve that goal. In 2005, for example, the government introduced tax credits for the installation of solar panels, without restrictions on the country of origin. Over the next six years, imports of Chinese solar panels increased to $2.7 billion a year, up from $21 million a year.
Chinese companies also have raced ahead in the market for electric vehicle batteries, but the Biden administration is hoping to leapfrog them by investing in a new generation of ideas. China controls three-quarters of the world’s supply of graphite, but “our technology requires sand and energy,” said Gene Berdichevsky, the chief executive of Sila. “Those can be sourced in quite a lot of places.”
The federal government is also rigging the competition against Chinese producers. Under the Inflation Reduction Act, passed last year, buyers of electric vehicles are eligible for tax credits of up to $7,500. But as of April 18, the credit is available only if at least half of the value of the vehicle’s battery was produced in the United States, Canada and Mexico, and at least 40 percent of the minerals were produced in the United States or by an approved list of allies. Over the next few years, those requirements will gradually rise to 100 percent for the battery and 80 percent for the minerals.
Other subsidies could take an additional $9,000 off the price of cars with American batteries. The incentives are enough that for the first time, some electric vehicles are now cheaper than comparable gas-powered cars.
The residents of Moses Lake are eagerly anticipating the benefits.
Adan Lopez, 20, is studying physics at Big Bend Community College in Moses Lake. He isn’t sure whether he wants to stay in the area. “Jobs are kind of limited around here,” he said. “If you want to do anything, people have to go to Spokane or Seattle.”
Brant Mayo, executive director of the Grant County Economic Development Council, said the Moses Lake region has been chasing factories since the early 1990s to bring higher-paying jobs to the area. “We want our kids and our grandkids, if they want to be in the area, to have an opportunity to do whatever they want here,” he said.