Biden administration approves $2.8 billion for EV battery production in the US

The US Department of Energy is awarding $2.8 billion in grants from the Bipartisan Infrastructure Law to shore up domestic battery manufacturing and mineral production, the White House announced Wednesday. The Biden administration is also launching a new government-wide initiative to strengthen supply chains to support electric vehicle manufacturing.

It was the latest move by President Biden to support the shift from polluting gas-powered cars to emissions-free electric vehicles, with the goal of making 50 percent of all new cars sold in 2030 electric. And it comes as automakers, mining officials, and environmentalists have sounded a warning about the US supply of key minerals needed to fuel the EV boom.

The DOE grants will go to 20 manufacturing and processing companies for projects across 12 states. According to the White House, these projects will support the production of enough lithium, graphite, and nickel to supply millions of new electric vehicle batteries annually.

In addition, the money will be used to fund the construction of the first large-scale, commercial lithium electrolyte salt production facility in the US. The DOE is also providing funding for an electrode binder facility and creating the first commercial scale domestic silicon oxide production facilities to supply anode materials for an estimated 600,000 EV batteries annually. Lastly, the DOE will fund the installation of the first lithium iron phosphate cathode facility in the US.

The White House is also launching an effort, dubbed the American Battery Material Initiative, “to mobilize the entire government in securing a reliable and sustainable supply of critical minerals used for power, electricity, and electric vehicles.”

The renewed effort will be crucial to shore up EV production in the US, which is still in its very early stages of development. The Inflation Reduction Act, the Democrats’ new tax and climate bill, devotes nearly $400 billion to clean energy initiatives over the next decade, including EV tax credits and financing for companies that manufacture clean cars in the US. And California said it would ban the sale of new gas-powered vehicles starting in 2035, a move that over a dozen other states are expected to follow.

But the only EVs that will be eligible for the $7,500 credit are ones that are made in North America using batteries with minerals dug out of the ground in the US or from its trading partners. These requirements are largely viewed by many observers as nearly unachievable because of the auto industry’s heavy reliance on battery materials and components from China.

The auto industry has been sounding the alarm about the insufficient situation domestically. “The US does not have significant processing capacity for EV battery materials and is reliant on other nations for refined raw materials, leaving the US market exposed to the risk of being impacted by supply chains outside of US control,” the Alliance for Automotive Innovation, which represents nearly every legacy automaker in the US, wrote in response to a request for comment by the Department of Interior.