Data Shows Foreign Direct Investment in the US Remained Strong in 2023

International companies invested over $133 billion in nearly 2,000 capital investment projects in the United States last year, pouring money into local economies nationwide. Almost 80% of these projects represented new investments, while about 20% represented expansions or co-locations.

Inflation and rising geopolitical tensions threatened the global economy in 2023. However, while total foreign direct investment (FDI) into the US economy fell by around 22% year over year, the total number of investment projects remained relatively constant.

South Korean Companies Made Major Investments in the US

FDI came from 68 countries in 2023, but a handful stand out as the most prominent sources. The top five countries alone — the United Kingdom, Switzerland, Germany, Canada, and Japan — account for 51% of all projects announced in 2023. However, when you look at dollars invested, South Korea was by far the biggest source of FDI last year, with companies investing over $21.3 billion into the US economy.

Significant investments made by South Korean companies in 2023 were focused on battery manufacturing for electric vehicles (EVs), including the following:

• Hyundai Motors and LG Energy Solution jointly invested $4.3 billion into a battery cell manufacturing facility in Bryan County, GA.
• LG Energy Solution invested $3.08 billion to establish new battery cell production lines at its existing plant in Holland, MI, to exclusively supply Toyota’s EV manufacturing operations in Kentucky.
• Samsung’s joint venture with General Motors to invest $3 billion in a new EV battery cell plant near New Carlisle, IN.

Renewable Energy and Environmental Technology are Driving Foreign Direct Investment

Given these major investments in the battery/EV sector, it is no surprise that renewable energy and environmental technology projects received the greatest total investments in 2023. Overall, investments in the Environmental Technologies cluster accounted for around $45.5 billion of inbound FDI into the US in 2023, a third of the total investment by dollar value.

The top five subsectors by total capital expenditures are all directly connected to renewable energy:

1. Batteries
2. Solar Electric Power
3. Other Miscellaneous Electrical Equipment and Components
4. Other Renewable Electric Power Generation
5. Wind Electric Power

These top five subsectors made up 42% of the total value of international investments last year, over $55.3 billion.

The South and Midwest are Key Destinations for Foreign Direct Investment

Southern and midwestern states drew significant volumes of FDI last year. Overall, Texas attracted the most foreign investment in 2023, with over $20.5 billion of capital expenditures (capex) across 237 projects. When you adjust for Gross Regional Product (GRP), New Mexico, South Carolina, and Indiana attract the most FDI.

Major Foreign Direct Investments in 2023

The following are examples of major foreign investments in the United States in 2023, not including the South Korean investments already listed above:

• Canada: In May 2023, Pattern Energy, a subsidiary of Canada Pension Plan Investment board, announced it will invest $5 billion to develop a wind facility in New Mexico, which is expected to provide energy to more than three million households to the Western US market once operational.
• Netherlands: In July 2023, StarPlus Energy, a subsidiary of Netherlands-Based Stellantis, announced it will invest $3.2 billion to establish a second EV battery manufacturing facility in Kokomo, IN, to serve North American markets.
• Germany: In March 2023, Scout Motors, a Volkswagen subsidiary, announced it is investing $2 billion in a new electric truck and SUV manufacturing facility in Blythewood, SC. At full capacity, the facility is expected to produce 200,000 vehicles per year.
• United Kingdom: in February 2023, UK-based Linde announced a $1.8 billion investment to create an on-site complex to supply clean hydrogen to an OCI plant in Beaumont, TX, that will serve the Gulf Coast region.
• India: In June 2023, Vikram Solar announced a $1.5 billion investment to open a new 4 GW solar module manufacturing facility in Brighton, CO, followed by a wafer and ingot facility somewhere in the US South.
• Singapore: In August 2023, Competitive Power Ventures, a subsidiary of Kenon Holdings, announced a $1.3 billion investment in a combined-cycle electric generator in Grundy County, IL, that will serve the wider region surrounding Illinois.

The latest data is clear: Interest by foreign companies in investing in new or expanded sites in the US remains very strong. This presents an excellent opportunity for economic development organizations seeking new business investment and jobs in their regions to get on these companies’ radars.

Business attraction and marketing efforts can target specific countries and industries and highlight the unique assets and benefits your region offers, such as available land, ease of permitting, business friendly permitting processes, access to a skilled workforce, proximity to major transportation and shipping hubs, and quality of life.

Are you interested in developing an international business investment strategy targeting particular industries? Or are you ready to develop and execute an FDI-focused business attraction and lead generation plan for your community? Camoin Associates can help.

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📍 Related Article:

• “Foreign Direct Investment in the US on the Rise” (March 7, 2023)