President Biden today announced $2.8 billion in grants to support domestic battery manufacturing as part of his administration's goal to have electric vehicles make up half of all new vehicles sold in the US by 2030.
The funding will support two facets of battery production:
- Mining and processing "critical minerals" like lithium and graphite under the new American Battery Materials Initiative.
- Battery manufacturing and assembly
The move comes amid pushback from foreign and domestic automakers over the requirements to have their EVs qualify for a $7,500 tax credit put in place as part of the Inflation Reduction Act.
For vehicles to qualify, the automaker must assemble the car and battery in the US, as well as mine a certain percentage of the minerals inside the battery domestically. These are big hurdles given the nascent battery and minerals industry in the US, leaving some companies scrambling to qualify their vehicles to stimulate sales.
"China currently controls much of the critical mineral supply chain and the lack of mining, processing, and recycling capacity in the US could hinder electric vehicle development and adoption, leaving the US dependent on unreliable foreign supply chains," the White House says.
Bolstering US production aims to "improve America’s energy independence, strengthen national security, support good-paying jobs across battery supply chains, and lower costs for working families," the White House adds.
Hopefully, it also means a greater chance your next EV purchase will qualify for the credit, but it will take a few years to construct new facilities. By the numbers, the funding will be enough for:
- Twenty manufacturing and processing companies in 12 states, including Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee, and Washington.
- Enough battery-grade lithium for 2 million EVs annually, as well as graphite and nickel production.
- A few firsts: the first commercial lithium electrolyte sale production facility, the first lithium iron phosphate cathode facility, and the first commercial scale domestic silicon oxide production facilities.
- 45% of the domestic need for battery binders.
To combat the not-so-glamorous side of mining all these minerals, the bill promises "a faster and fairer domestic process that meets strong environmental and labor standards, ensures meaningful community engagement and consultation with Tribal Nations, and reduces time and cost of permitting."
A new "battery belt" has emerged since the Biden administration announced the federal tax credit over the summer, with multiple automakers committing to domestic battery production.
Today, for example, BMW announced a $1.7 billion investment that includes $1 billion to prepare for the production of EVs at its existing US manufacturing facility in Spartanburg, South Carolina, and $700 million to build a new high-voltage battery assembly facility in nearby Woodruff, SC.
Last week, Honda also confirmed it will build a $4.4 billion battery factory in Fayette County, Ohio, in partnership with LG Energy Solution. Ford, GM, Volkswagen, and Stellantis (Jeep, Dodge, Chrysler) have similar plans.
The "rust belt," a term for the factory-rich region of the US that has seen many of those facilities close as the work moved overseas, is also getting a revival with EV production (Biden said recently it should be renamed the “Silicon Heartland"). General Motors, Tesla, Rivian, and others will produce EVs in the US in order to qualify their vehicles for the credit.