"Let's Benefit from IRA"... MS Invests in US Battery Material Startup

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[Asia Economy Reporter Yujin Cho] Microsoft (MS) has made a private investment in a battery materials startup. Previously, other U.S. battery startups such as Sila Nanotechnology, Enovix, and Amprius Technologies also succeeded in attracting large-scale investments. Due to the expected benefits from the U.S. Inflation Reduction Act (IRA), a flood of investment funds is pouring into American battery companies.

On the 14th (local time), The Wall Street Journal (WSJ) reported that MS's Climate Innovation Fund, which manages a total fund of $1 billion, decided to invest in the battery materials startup 'Group14 Technologies.' The specific investment amount was not disclosed.

Group14 has received a total investment of $214 million so far from Oman’s sovereign wealth fund, climate funds sponsored by private equity firm Lightrock, and earlier raised $400 million from Porsche, Riverstone Holdings, BlackRock, and a joint venture with Singapore’s state-owned investment firm. In addition to private investors, it recently received a $100 million grant from the U.S. Department of Energy through the Infrastructure Law.

Group14, headquartered in Woodinville, Washington, is a silicon anode production company founded in 2015. Compared to existing graphite technology, it possesses technology to create more efficient and powerful batteries, and the company explains that it can drastically reduce charging time. WSJ noted that Group14 was valued at $3 billion during its recent fundraising process.

The new investment funds will be used for a battery materials production facility project in central Washington state capable of producing batteries for at least 100,000 electric vehicles.

WSJ analyzed that funds expecting benefits from the Inflation Reduction Act are pouring into U.S. battery companies. According to the Inflation Reduction Act, signed into law by U.S. President Joe Biden in August, from next year, tax credit benefits will only be provided for electric vehicles finally assembled in North America.

Accordingly, starting next year, only batteries using minerals mined and processed in the U.S. or countries with which the U.S. has a Free Trade Agreement (FTA) at a certain ratio or higher will be eligible for electric vehicle tax credit benefits.

Besides Group14, competitors such as Sila Nanotechnology, Enovix, and Amprius Technologies, other U.S. battery startups, have also succeeded in attracting large-scale investments.

Sila recently received a $100 million grant from the Department of Energy and raised $600 million from private investors, while Enovix and Amprius succeeded in going public through mergers with Special Purpose Acquisition Companies (SPACs).

This content was produced with the assistance of AI translation services.