The Biggest Winners in America’s Climate Law: Foreign Companies
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The Biggest Winners in America’s Climate Law: Foreign Companies

U.S. seeks to build domestic supply chains but needs overseas expertise

By AMRITH RAMKUMAR and Phred Dvorak
Fri, Jul 21, 2023 8:49amGrey Clock 4 min

The 2022 climate law unleashed a torrent of government subsidies to help the U.S. build clean-energy industries. The biggest beneficiaries so far are foreign companies.

The Inflation Reduction Act has spurred nearly $110 billion in U.S. clean-energy projects since it passed almost a year ago, a Wall Street Journal analysis shows. Companies based overseas, largely from South Korea, Japan and China, are involved in projects accounting for more than 60% of that spending. Fifteen of the 20 largest such investments, nearly all in battery factories, involve foreign businesses, the Journal’s analysis shows.

These overseas manufacturers will be able to claim billions of dollars in tax credits, making them among the biggest winners from the climate law. The credits are often tied to production volume, rewarding the largest investors.

Japan’s Panasonic, one of the few companies to publicly estimate the impact of the law, could earn more than $2 billion in tax credits a year based on the capacity of battery plants it is operating or building in Nevada and Kansas. The company, which supplies batteries to electric-vehicle maker Tesla, is considering a third factory in the U.S. that would lift that total.

The climate law is designed to build up domestic supply chains for green-energy industries, but the reality is that the technology for building batteries and renewable-energy equipment resides overseas. The incentives are leading these companies to invest in the U.S., often alongside domestic businesses.

“It’s a testament to the fact that we still live in a globalised economy,” said Aniket Shah, head of environmental, social and corporate governance—or ESG—strategy at investment bank Jefferies. “You can’t just out of nowhere put up borders and say, ‘It has to be made in America by American companies.’ ”

The Journal looked at roughly 210 clean-energy projects and company initiatives spurred by the law, including projects tracked by industry groups American Clean Power and E2 (Environmental Entrepreneurs); announcements from companies and state and local governments; and media reports. Of those, about 140 disclosed investment amounts totalling roughly $110 billion.

Projects were characterised as either wholly U.S. ventures or foreign if overseas companies are contributing significant investment or technology. Renewable-power facilities and projects already in the works before the law passed were excluded.

Forecasters estimate the climate law could unleash some $3 trillion in total clean-energy investments over the next decade. U.S. companies are also investing heavily, including Tesla, solar-panel maker First Solar and hydrogen producer Air Products and Chemicals.

Full domestic supply chains for batteries or solar panels are still years away because foreign companies dominate nearly every step in the process, from raw materials to sophisticated parts.

Panasonic is considering the addition of a third battery factory in the U.S. that would increase the Japanese company’s tax-credit haul. PHOTO: JACOB KEPLER FOR THE WALL STREET JOURNAL

The large investments by overseas businesses have generally been welcomed by U.S. communities, many of which have benefited for decades from spending and jobs created by foreign automakers and other companies. But some investments from Chinese companies have fuelled a backlash as tensions between the two countries escalate.

At least 10 of the projects representing nearly $8 billion in investments included in the Journal’s analysis involve companies either based in China or with substantial ties to China through their core operations or large investors.

Some projects are facing resistance, including two in Michigan: a $3.5 billion battery factory that Ford Motor is building with technology and expertise from China’s CATL; and a $2.4 billion battery-component factory from China-based Gotion. Ford is keeping 100% ownership of the battery factory—in part to sidestep the issue of public funds flowing to CATL, according to a person with knowledge of the deal. Ford is licensing the battery-making know-how and services from CATL, the companies said.

But China hawks say the payments Ford makes to CATL mean the Chinese company reaps indirect benefits from government support.

“What we’re seeing is foreign policy conflict with climate policy and trade policy,” Shah said. “We’re going to have to decide as a country what matters more: our enmity with China or our desire to decarbonise quickly.”

Microvast, a startup that was planning to build a more than $500 million battery-component plant in Kentucky, was named as a potential recipient of a $200 million grant from the Energy Department last year. The department later rejected the application. The move followed criticism from Republicans about the company’s ties to China, which include a China subsidiary that accounts for more than 60% of its revenue.

The Energy Department didn’t give a reason for withdrawing the grant. The department takes a number of factors into account when evaluating such projects, including technology risks and the potential for foreign influence, a spokeswoman said.

Microvast, based in Stafford, Texas, says it is a U.S. company and that Chief Executive Yang Wu is an American citizen. The company recently scrapped plans for the Kentucky plant.

“We must be assured that these taxpayer dollars are not being funnelled to the Chinese,” said Cathy McMorris Rodgers (R., Wash.), chair of the House of Representatives committee on energy and commerce, during a June hearing.

Microvast is committed to its goals of investing in the U.S. through other facilities, a spokeswoman said.

The issue is expected to come to a head when the Treasury Department completes rules for electric-car tax credits. The department has proposed that cars using battery materials that were produced by a “foreign entity of concern” such as a Chinese company wouldn’t qualify for tax credits beginning in 2025.

Many expect Treasury to use a loose standard so that some cars qualify, potentially fuelling criticism from some politicians who crafted the climate law such as Sen. Joe Manchin (D., W.Va.), who has argued more lenient criteria go against the intent of the Inflation Reduction Act. Treasury is monitoring shifting markets and supply chains while making rules that advance the law’s goals, a spokeswoman said.



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Why Family Offices Are Emerging as Preferred Partners for CRED Managers

As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.

By Opinion: Faris Dedic
Fri, May 23, 2025 3 min

Family offices are increasingly asserting their dominance in Australia’s private credit markets, particularly in the commercial real estate debt (CRED) segment.

With more than 2,000 family offices now operating nationally—an increase of over 150% in the past decade, according to KPMG—their influence is not only growing in scale, but also in strategic sophistication.

Traditionally focused on preserving intergenerational wealth, COI Capital has found that family offices have broadened their mandates to include more active and yield-driven deployment of capital, particularly through private credit vehicles.

This shift is underpinned by a defensive allocation rationale: enhanced risk-adjusted returns, predictable income, and collateral-backed structures offer an attractive alternative to the volatility of public markets.

The Competitive Landscape for Manager Mandates

As family offices increase their exposure to private credit, the dynamic between managers and capital providers is evolving. Family offices are highly discerning capital allocators.

They expect enhanced reporting, real-time visibility into asset performance, and access to decision-makers are key differentiators for successful managers. Co-investment rights, performance-based fees, and downside protection mechanisms are increasingly standard features.

While typically fee-sensitive, many family offices are willing to accept standard management and performance fee structures when allocating $5M+ tickets, recognising the sourcing advantage and risk oversight provided by experienced managers. This has created a tiered market where only managers with demonstrated execution capability, origination networks, and robust governance frameworks are considered suitable partners.

Notably, many are competing by offering differentiated access models, such as segregated mandates, debt tranches, or tailored securitisation vehicles.

Onshore vs. Offshore Family Offices

There are important distinctions between onshore and offshore family offices in the context of CRED participation:

  • Onshore Family Offices: Typically have deep relationships with local stakeholders (brokers, valuers, developers) and a more intuitive understanding of planning, legal, and enforcement frameworks in Australian real estate markets. They are more likely to engage directly or via specialised mandates with domestic managers.

  • Offshore Family Offices: While often attracted to the yield premium and legal protections offered in Australia, they face structural barriers in accessing deal flow. Currency risk, tax treatment, and regulatory unfamiliarity are key concerns. However, they bring diversification and scale, often via feeder vehicles, special-purpose structures, or syndicated participation with Tier 1 managers.

COI Capital Management has both an offshore and onshore strategy to assist and suit both distinct Family Office needs.

Faris Dedic

Impact on the Broader CRED Market

The influx of family office capital into private credit markets has several systemic implications:

  • Family offices, deploying capital in significant tranches, have enhanced liquidity across the mid-market CRE sector.

  • Their ability to move quickly with minimal conditionality has contributed to yield compression, particularly on low-LVR, income-producing assets.

  • As a few family offices dominate large allocations, concerns emerge around pricing power, governance, and systemic concentration risk.

Unlike ADIs or superannuation funds, family offices operate outside the core prudential framework, raising transparency and risk management questions, particularly in a stress scenario.

So what is the answer? Are Family Offices the most Attractive?

Yes—family offices are arguably among the most attractive funding partners for CRED managers today. Their capital is not only flexible and long-term focused, but also often deployed with a strategic mindset.

Many family offices now have a deep understanding of the risk-return profile of CRE debt, making them highly engaged and informed investors.

They’re typically open to co-investment, bespoke structuring, and are less bogged down by institutional red tape, allowing them to move quickly and decisively when the right opportunity presents itself. For managers, this combination of agility, scale, and sophistication makes them a valuable and increasingly sought-after partner in the private credit space.

For high-performing CRED managers with demonstrable origination, governance, and reporting frameworks, family offices offer not only a reliable source of capital but also a collaborative partnership model capable of supporting large-scale deployments across market cycles.

Faris Dedic is the Founder and Managing Director of DIG Capital Advisory and COI Capital Management

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