e-VAC awarded $112M tax credit boost for US permanent magnets facility
April 23, 2024
e-VAC Magnetics, which is part of the VAC Group headquartered in Hanau, Germany, has been awarded a $111.9 million Qualifying Advanced Energy Project Tax Credit to advance the construction of its first US manufacturing facility in Sumter, South Carolina. The facility was one of more than 100 projects to receive an award under the Section 48c programme, which is designed to help accelerate domestic clean energy manufacturing and reduce greenhouse gas emissions at industrial facilities.
e-VAC, which is part of Vacuumschmelze (’VAC Group’ or ‘VAC’), produces rare earth neodymium-iron-boron (NdFeB) magnets, which are critical to automotive, defence, industrial and renewable energy applications. The company broke ground on the facility in March, and expects to complete the facility in late autumn 2025. The project is expected to create 300 new jobs in Sumter.
“e-VAC is proud to invest in America’s 21st century supply chain and to advance clean energy manufacturing efforts,” said Dr Erik Eschen, VAC Group Chief Executive Officer. “This award demonstrates the importance of high-quality, high-performance magnetic materials, which are key enablers to electrification and energy efficiency across a range of industries. Our facility will help to establish a resilient, US-based supply chain for decades to come.”
In January 2023, e-VAC announced a binding long-term supply agreement with GM to manufacture permanent magnets, using locally sourced raw materials, for the electric motors used in a broad portfolio of EVs in North America. In September 2023, the US Department of Defence entered into an agreement with e-VAC as part of its ‘Mine-to-Magnet’ supply chain initiative, ensuring US companies are able to source and produce the rare earth permanent magnets that are essential components in the F-35, Unmanned Aerial Vehicles, and numerous other defence systems.
In October 2023, VAC was acquired by Ara Partners, a private equity and infrastructure firm that specialises in industrial decarbonisation investments. Ara’s investment has provided VAC with the capital to expand and build a rare earths value chain.
“The Inflation Reduction Act is helping companies invest in America and build critical domestic supply chains,” stated Tuan Tran, partner at Ara Partners. “Suppliers like e-VAC will play an important role in decarbonising the industrial world, and we are committed to helping these companies expand their footprints here in the US while substantially reducing emissions.”
