Yellen said in remarks in central Kentucky that Treasury Department research using Rhodium Group data, opens new tab also shows clean energy investment in other communities has risen to $3.5 billion per month - a $1 billion increase - thanks to the incentives in the 2022 Inflation Reduction Act (IRA).
Yellen is visiting Kentucky, a heavily Republican state that Democratic President Joe Biden is not expected to win in the Nov. 5 U.S. election, to promote the state's growing supply chain for electric vehicle (EV) battery production that Biden touted in his State of the Union address to Congress last week.
"We've seen investments grow significantly. Companies have announced almost $650 billion in investments in clean energy and manufacturing across the country since the start of the administration," Yellen said.
Yellen is visiting Advanced Nano Products, a South Korean-owned battery materials manufacturer that has invested $49 million in a new factory in Elizabethtown, Kentucky that will employ around 100 workers after it starts production in May.
The facility will supply carbon nanomaterials to the $5.8 billion BlueOval SK battery manufacturing complex under construction a few miles to the south by Ford Motor Co and South Korea's SK Group. The plant will eventually employ more than 5,000 workers.
Japan's AESC is also building a $2 billion battery factory in Bowling Green, Kentucky that will employ 2,000 people.
All of these facilities are taking advantage of IRA clean energy manufacturing tax credits that provide up to 30% of the investment costs, with a 10% bonus if located in a community historically dependent on fossil fuel energy or one that is economically disadvantaged. They also will benefit from consumer EV tax credits of up to $7,500 on the purchase of vehicles that meet U.S. production and battery content requirements.
Kentucky accounted for just under 5% of U.S. coal production in 2022, ranking it fifth among the states producing the fossil fuel, according to the U.S. Energy Information Administration.
The right-to-work state has captured over $11.6 billion in EV-related investments partly because it sits at the center of a growing Mid-South auto manufacturing belt stretching from Georgia to Texas. The BlueOval SK venture also is benefiting from a $9.2 billion Department of Energy loan.
SALES HURDLES
The investments have faced some obstacles, including a slowdown in U.S. EV sales and Ford's decision to freeze $12 billion in EV investments last year, including delaying one of two plants at the BlueOval SK site in Glendale, Kentucky.
Yellen told Fox Business in an interview that while sales may not have met rosy expectations over the past year, consumers will want EVs as they become more affordable and more charging stations are built, partly with federal infrastructure funding.
"The future for EVs is extremely bright in the United States. More subsidies will come into play that'll help make these cars affordable, and over time, their costs will decline."
Yellen said the Treasury would take further steps to encourage leaders and businesses in more than 150 U.S. cities with high poverty rates to take advantage of the tax credits to attract investment.
