The West Coast of the USA offers many business opportunities for German companies. While buzzwords such as smart production and AI will remain hot topics, there are also numerous other areas that currently offer particularly exciting prospects for transatlantic cooperation. Here, we have identified the most promising industries that offer German companies a particularly large number of market opportunities on the US West Coast.
Battery production and recycling
The future of mobility is electric, and the US is well on its way to realizing this vision. Electric vehicle sales are up a whopping 66% and expected sales are expected to reach $61.18 billion by 2023. A significant part of this growth story is taking place in California, where 39% of all Electric Vehicles (“EVs”) registered nationwide are already on the road. The California Energy Commission has ambitious plans to achieve $2.9 billion worth of zero-emission transportation infrastructure as early as this year.
The growing demand for electric vehicles has had a domino effect on the battery and recycling industry. It is therefore no surprise that the demand for batteries is rapidly increasing to meet the demand for electric vehicles. It seems all the more important that the so-called Inflation Reduction Act subsidizes battery manufacturers in the US and allows them tax rebates and property tax deductions in California as well.
As German companies are pioneers in the field of electromobility, they have good opportunities to establish ties in the US market. In 2019, €1 billion was allocated for battery cell manufacturing and €16.6 million was allocated to support the development of a holistic recycling approach for lithium-ion batteries. With a combination of leading research and development in Germany and investment readiness in the US, this cooperation holds enormous potential for innovation and sales.
Aviation
In the far north of the USA, Washington State is still considered the best location for aircraft manufacturing in the USA. The aviation cluster in Seattle is the largest in the world and is home to Boeing, among others. Over 90% of commercial aircraft produced in the US are built in Washington. The region is also an important location for the development of environmentally friendly aviation fuels. A positive signal: the aviation market is expected to grow by more than 5% annually between 2022 and 2027.
There is great potential here in the exchange between representatives from business and science in the field of sustainable aviation between Germany and the USA. German manufacturers must be helped to develop and realize sales potential. In particular, the focus is on alternative fuels and new, less carbon-intensive turbines.
Climate Tech
The global market for climate technologies is expected to reach a market value of USD 147.5 billion by 2032, registering an annual growth rate of 24.2%. The US is particularly responsible for this increase, as it is not only the largest economy and second-largest CO2 emitter, but also the largest VC investor in Climate Tech (totaling USD 100 billion since 2010).
Within the U.S., California records the highest VC investments in climate technologies and also promotes them statewide. Due to ambitious climate targets, California wants to become CO2-neutral by 2045 and has launched a climate package worth USD 48 billion for this purpose, which among other things invests USD 2.8 billion in technological forest fire control and USD 5.2 billion in drought control. Innovative climate technologies play a crucial role in decarbonizing and increasing the efficiency of the industry. This offers great market opportunities for German SMEs.
Sustainable Packaging and circular economy
The market for sustainable packaging is also growing considerably and will reach an estimated value of USD 470.3 billion by 2027. Globally, around USD 1.3 billion will be invested in the circular economy to increase recycling rates. The National Recycling Strategy (2021) aims to increase recycling rates from 30% to 50% by 2030. California is leading the way by investing $270 million over the next three years to improve recycling systems and the circular economy.
California’s SB 343 (2021) law specifies that products must meet new recyclability criteria to meet the goal of a $15 million climate package. Germany has been a global leader in the circular economy since 2012 through the implementation of its resource efficiency program. Combining Germany’s lead in research and development with investments in the US also holds great potential for innovation and sales. Sustainable packaging is already an important factor in purchasing decisions for 64% of consumers.
Want to know more?
If you’re interested in any of these industries, get in touch! We’ll be happy to help identify market opportunities for German companies.
Want to learn more about the circular economy and sustainable packaging and related opportunities in the US market? Then register directly for our next event, the German American Circular Economy Conference on June 8 in San Francisco. You can find all information here.
