Biden touts legislative wins to boost U.S. production of microchips, EVs in State of the Union

WASHINGTON — President Joe Biden, now halfway through his term, celebrated major legislative wins that are designed to boost U.S. production of semiconductors, electric vehicles, batteries and more during his second State of the Union address.

“We’re going to make sure the supply chain for America begins in America,” Biden said in a speech late Tuesday from the nation’s capital.

The State of the Union comes as Biden now faces a divided Congress with a House Republican majority and as the U.S. emerges from the COVID-19 pandemic. The president and Congress also face another pressing challenge of reaching a debt limit deal as well as lingering concerns ranging from Russia’s war in Ukraine to ongoing tensions with China.

Though Biden said more must be done to support steady U.S. growth and lower costs, he pointed to a resilient economy, with public and private investments in manufacturing and infrastructure continuing across the U.S. and inflation showing signs of improvement.

“Jobs are coming back. Pride is coming back because of choices we made the last several years,” Biden said. “This is, in my view, a blue-collar blueprint to rebuild America.”

The president used part of his speech to tout major legislation achieved in his first two years in office, such as the bipartisan CHIPS and Science Act, the bipartisan infrastructure law and the more recent Inflation Reduction Act passed by Democrats last year.

The infrastructure law passed in November 2021 includes funding to help build a national network of EV charging stations and more than $7 billion to support the U.S. battery supply chain.

The Inflation Reduction Act also contains provisions aimed at boosting U.S. manufacturing of EVs and batteries, including manufacturing tax credits for battery cells and modules produced in the U.S. and federal incentives for vehicle buyers.

The law revised the rules of a $7,500 tax credit for consumers buying new EVs, known as 30D, to include more complex eligibility restrictions that are designed to incentivize domestic production, reduce reliance on foreign supply chains and prevent wealthy car buyers from getting a discount.

As of the bill’s Aug. 16 signing, eligible EVs must be assembled in North America. New restrictions on sticker price and buyer income took effect Jan. 1. Additional rules on battery component and critical mineral sourcing will take effect after Treasury issues its proposed guidance, which is expected sometime in March.

Legislation aside, automakers and their battery partners have committed to investing more than $100 billion to expand U.S. production of EVs since 2017. That includes recent announcements to locate battery material and component operations throughout the Midwest and Southeast, according to the Alliance for Automotive Innovation, an industry group that represents the U.S. auto industry.