“Dozens of planned green factories…have been cancelled, with more delayed or downsized…. Now there’s another, major threat to the sector,” reports Bloomberg News:
The vast tract of land off Route 85 was meant to be a symbol of Made-in-America manufacturing. A billion-dollar battery factory was going to rise, bringing thousands of new jobs. The business announced, “Get Ready Arizona,” the governor said the state was thrilled and even the US president gave the project a shoutout.
But here, in the boomtown of Buckeye, less than an hour away from Phoenix, the 214-acre lot sits empty. Work on the site had started, said Shelby Lizarraga, who manages the gas station next door, “but then it went all quiet.”
Four years after the fanfare, battery maker Kore Power Inc. abandoned its plans for a plant in Buckeye. The company’s chief executive officer stepped down and a promised $850 million federal loan was cancelled.
Kore isn’t alone in its dashed ambitions. In Massachusetts, a wind turbine cable factory set to be built on the site of a former coal power plant was scrapped. In Georgia, the construction of a facility that would have made parts for electric vehicle batteries was suspended more than halfway through. And in Colorado, a lithium-ion battery maker said it wouldn’t go forward with its factory there.
They’re among the dozens of planned green factories that have been cancelled, with more delayed or downsized, all hit by soaring costs, high interest rates and slow-growing EV demand. About 9% of the $261 billion in green factory investment announced since 2021 has been shelved — most of it since President Donald Trump returned to office in January — according to research firm Atlas Public Policy. Energy Secretary Chris Wright has said his agency doesn’t plan to move forward with some of the big-dollar loans that had been made to green manufacturing plants during President Joe Biden’s term.
Now there’s another, major threat to the sector: Trump’s massive tax-and-spending package, which rolls back Biden’s generous green subsidies….it phases out credits for producing solar and wind energy years before they were designed to expire. It also ends federal tax credits for electric vehicles this September instead of in 2032.
Curbing the subsidies will reduce the budget deficit. But other provisions in the recently-passed tax-and-spending package will increase the budget deficit, such as by exempting certain kinds of income from taxation for economically-irrational reasons and by increasing military and DHS spending.
The increase in the national debt resulting from the recently passed tax-and-spending package could fuel inflation. Massive debt-financed government spending increased the inflation rate under President Biden. Joe Biden’s deficit-increasing policies caused inflation, according to even Democratic economists like Harvard’s Larry Summers — who was Treasury Secretary under President Clinton — and Obama economic advisor Steven Rattner.
The federal budget deficit doubled to roughly $2 trillion from 2022 to 2023, noted the Tax Foundation. And it will be around $2 trillion this year. That doubling is “basically unprecedented in U.S. history during relative peace and prosperity,” noted economist Brian Riedl in September 2023. To run a budget deficit of over 6% of GDP at a time of peace and economic prosperity is unprecedented and irresponsible.
