Climate and manufacturing projects that Democrat President Joe Biden handed massive subsidies to are failing, despite receiving billions of dollars in taxpayer money.
A Financial Times investigation published Monday found that $84 billion worth of Biden’s flagship climate and industrial initiatives are now failing.
The floundering projects backed by the White House are now paused or delayed, the report revealed.
The president’s Inflation Reduction Act (IRA) and Chips and Science Act pumped huge sums of cash into advancing the Democrats’ green agenda by boosting EV manufacturing.
Of the nearly $228 billion of manufacturing projects worth more than $100 million that are subsidized by Biden’s legislations, roughly 40% — totaling $84 billion — are paused or delayed, the outlet reported.
The setbacks raise questions about the viability of Biden’s efforts to create a U.S. green energy manufacturing supply chain.
Electric vehicle (EV) demand has plummeted as persistent inflation, high interest rates, and Chinese competition continue to dog domestic manufacturers, according to FT.
“There will be attrition,” John Hensley, vice-president of markets and policy analysis at American Clean Power, told the FT.
“Not every single one of these facilities is going to come online.”
Slowing U.S. demand for EVs has contributed to the manufacturing freezes.
Korean auto parts maker Samkee has also delayed its electric vehicle lines in Alabama by one to two years, the FT reported.
EV market share plummeted in the first quarter of 2024.
The average EV sales price fell 3.6% year-over-year to $44,186 in March as dealers looked to offload inventory.
According to the FT, a difficult macroeconomic backdrop has also contributed to the delays.
Elevated interest rates have raised businesses’ cost of borrowing as the Fed continues to hold its federal funds rate target range between 5.25% and 5.5%, a 22-year high, since July 2023.
Inflation is also adding to the strain on the fledgling projects.
Prices up more than 20% since Biden became president in January 2021.
“Everybody’s running into higher-than-expected costs just because of labor and supply chain,” Craig MacFarland, mayor of Casa Grande, Arizona, told the FT.
Chinese competition has also caused problems for Biden’s flagship manufacturing initiative.
Communist China’s superiority in establishing solar supply chains combined with its government’s heavy subsidization of raw polysilicon makes it difficult for U.S. companies to compete, even with tariffs and Biden-backed subsidies.
The 2022 Inflation Reduction Act and Chips and Science Act provided more than $400 billion in tax credits, loans, and grants to manufacturers.
The funding was an effort by the White House to spark domestic green energy technology and semiconductor production.
“Of course, we want to see these projects get up and moving as fast as possible,” Alex Jacquez, special assistant to the president for economic development and industrial strategy, told the FT.
“We continue to work to clear barriers related to permitting, to financing, where they exist.”
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