U.S. Treasury Secretary Janet Yellen traveled to North Carolina on Thursday to tout hundreds of billions of dollars in clean energy investments enabled by federal tax incentives as President Joe Biden struggles to win credit among voters for his economic record.
Yellen toured a Livent (LTHM.N) facility in Bessemer City, North Carolina, that processes lithium hydroxide, a key ingredient in electric vehicle (EV) batteries.
The plant near Charlotte has increased its capacity by 50% in recent years due to increased demand for EVs, stoked in part by tax credits of up to $7,500 in the 2022 Inflation Reduction Act (IRA). The project and others like it are adding cutting edge technology to an area hard hit when legacy industries like textiles left for other countries.
Yellen, who spoke in front of one-ton bags of lithium hydroxide powder at a Livent warehouse, said the "battery belt" arising across the U.S. Midwest and South showed the administration's strategy is working and contributing to current low rates of unemployment and ongoing economic growth.
"Scaling up our domestic manufacturing capacity - particularly in new industries - can help create well-paying, middle-class jobs for Americans across the country, serving people and places that have too often been left behind," Yellen said.
ENVIRONMENTAL BALANCE
She said investments similar to Livent's were taking place across the country, with $142 billion in EVs and batteries and $71 billion in clean energy manufacturing, since the IRA was approved last year.
Nearby investments in the pipeline include Albermarle Corp's (ALB.N) planned 2026 reopening of the Kings Mountain mine closed 35 years ago.
Piedmont Lithium Inc's (PLL.O) plans to build a new open-pit lithium mine in the same geologic formation 25 miles west of Charlotte to supply automaker Tesla (TSLA.O) have drawn opposition from some local residents over groundwater and other environmental concerns, exposing tradeoffs in the clean energy transition.
Yellen told reporters she supports more lithium mining done in "an environmentally appropriate way" to reduce U.S. dependence on China for the strategic metal.
North Carolina Governor Roy Cooper, a fellow Democrat who joined Yellen on the Livent tour, said lithium mining was "critical to move into the clean energy economy" and make its supply chains fully American. The Livent plant now processes lithium brine largely from Argentina and Canada.
STRONG GROWTH, LITTLE CREDIT
Increased investment in new manufacturing plants, machinery and warehouses, which include clean energy and 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 front-runner 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.
"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."
Yellen said she hoped that higher wages and falling prices for eggs and other products that have returned to their pre-pandemic level will cause Americans "to gradually see that things are getting better."
Cooper, who presides over a crucial battleground state in the 2024 election, said such investments were not aimed at "instant gratification" and were just starting to gain visibility.
"We've been waiting and waiting and waiting for this kind of infrastructure investment in every state in the country. We finally have it," he said. "It's going to be important for years to come."
