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New US bill provides $8 billion for companies building EVs, batteries and more

The government would provide up to a 30% tax credit for companies to expand or build new facilities that make products to reduce carbon emissions.

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- 02:04
US Capitol

The bill would set aside $8 billion for companies to take advantage of.

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The Biden administration and Democrats in Congress asserted themselves as a cohesive force to tackle climate change, while ensuring the economy still offers good-paying jobs. A new bill aims to put that thinking into play directly. On Monday, Democratic Sens. Debbie Stabenow of Michigan and Joe Manchin of West Virginia introduced the American Jobs in Energy Manufacturing Act, which would provide up to a 30% tax credit for companies building products and technology that reduce carbon emissions.

More specifically, these companies would need to expand or build new facilities in the US and employ American workers to build various "parts and technologies needed to reduce carbon emissions," according to the announcement. For example, firms making electric car batteries or EVs themselves would eligible. As would companies in the US making semiconductor chips, components to strengthen the renewable energy sector and carbon-capture technology. Half of the $8 billion proposed in the legislation would be set aside for communities where coal mines and plants closed in an effort to bring along areas reliant on fossil fuel production.

"We have fallen behind countries like China, and the COVID-19 crisis has exposed gaps in our domestic manufacturing," Sen. Stabenow said in a statement. "The good news is, we can do something about it. I introduced the American Jobs in Energy Manufacturing Act to address our supply chain shortages and drive investment in clean energy, automotive and battery manufacturing. This bill ensures that America – not China – will lead the way in the clean energy revolution."

Stabenow's bill also comes as the US manufacturing reels from a semiconductor chip shortage as lawmakers question the US supply chain's vulnerability in the future. President Biden last week signed an executive order to conduct a short-term and long-term review of the US' supply chain for rare earth materials and associated elements to boost production of the chips and future EV batteries. Ford CEO Jim Farley went as far as calling on the federal government to support domestic production.

The legislation already has the backing of numerous trade groups representing the auto industry. Further, Ford, General Motors and Stellantis have already come out to support the bill individually outside of auto industry trade groups.

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