Three companies are creating a joint venture to produce battery cells for commercial electric vehicles in the United States. Cummins (CMI), Paccar (PCAR), Daimler (MBG.DE) have created a joint venture that will spend $2 to $3 billion to build a battery cell factory in a yet to be determined U.S. location. Yahoo Finance Senior Reporter Pras Subramanian breaks down the deal and discusses the growing EV investments in the United States.
JULIE HYMAN: Well, three companies are partnering to bring battery cell production to the US. The joint venture is going to be dedicated to accelerating and localizing battery cell manufacturing to the states. To tell us more about this and who is involved, Yahoo Finance's Pras Subramanian is joining us. So who's partnering up here?
PRAS SUBRAMANIAN: Hey, Julie. So it's basically Accelera, which is engine maker Cummins's zero emissions arm, partnering with Daimler Truck and US truck maker PACCAR, which is behind brands like Kenworth and Peterbilt. They're forming a joint venture to make battery cells for commercial vehicles and other industrial applications. The JV will make LFP-type batteries, which are cheaper and better for heavy use and shorter distances, perfect for short-haul trucking.
So the companies say the total investment will be around $2 to $3 billion with a 21-gigawatt hours of annual output. The JV did not say, however, where they'll actually build this factory, though perhaps near a Cummins or PACCAR plant in the US. But I got to say, Julie, it's another win for the US and EV battery investment in this country.
JULIE HYMAN: And similarly, we're also seeing automakers investing in EVs in the US. So how does this project then fit into that bigger picture?
PRAS SUBRAMANIAN: So earlier today, the BlueGreen Alliance, which is a foundation that tracks sort of clean energy investment in environmental issues, tabulated some data and found out that through the last couple of years, the amount of total EV investments in batteries and plants and things like that is $154 billion in total investment and leading to about 188,000 total new jobs across the country and in that growing battery belt in the center of the country. So top five companies in terms of spend are LG, Tesla, GM, Ford, and SK Innovation, which is the South Korean battery company. So a lot of big deals in this space, more investment coming. It is, like I said, a big win for the White House and also backers of manufacturing here in the US.
BRAD SMITH: And so who right now, just as the broader context here, is the battery leader and who is making the best effort to really try and cut into that market share?
PRAS SUBRAMANIAN: In terms of making the most batteries in the US or in investment, I would say it's LG. They have the biggest investment, around $17 billion so far in the US. And they make batteries for GM, Ford as well, just sort of across the board there. But you see more from Tesla, Panasonic, and also SK Innovation, which is Ford's big partner. They're going to build-- they're helping Ford build a big plant in Tennessee and Kentucky that's coming up probably next year.
BRAD SMITH: All right, great insights as always. Pras, thank you so much for helping us break this down. Appreciate it.