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US invests $3.5B in Battery Manufacturing

17 November, 2023

US invests USD 3.5B in Battery Manufacturing

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The US government announced it will invest $3.5B in Battery Manufacturing to start boosting Clean Energy and Create Jobs.

Where will the investment be used?

Two years after the signing of the Bipartisan Infrastructure Law by President Biden, the U.S. Department of Energy (DOE) has unveiled an investment of up to $3.5B from the Infrastructure Law. This substantial funding aims to propel the domestic production of advanced batteries and battery materials across the nation. Aligned with President Biden’s “Investing in America” agenda, this financial injection will result in the establishment of new, retrofitted and expanded domestic facilities for battery-grade processed critical minerals, battery precursor materials, battery components, and cell and pack manufacturing.

Why is this Battery Manufacturing investment necessary?

For two main reasons: to achieve net-zero emissions, and to create jobs.

Investments in battery manufacturing and its associated sub-industries play a pivotal role in supporting the clean energy industries of the future, including renewable energy and electric vehicles. The investment, which places a significant emphasis on creating and retaining well-paying union jobs in the manufacturing sector, is administered by DOE’s Office of Manufacturing and Energy Supply Chains (MESC). It aligns with the Biden-Harris Administration’s ambitious goals of achieving a net-zero emissions economy by 2050, having electric vehicles constitute half of all new light-duty vehicle sales by 2030, and building a robust domestic battery and vehicle supply chain.

U.S. Secretary of Energy Jennifer M. Granholm emphasized:

Positioning the United States front and center to meet the growing demand for advanced batteries is how we boost our global competitiveness, maintain and create good-paying jobs, and strengthen our clean energy economy. President Biden’s historic investments are giving the boost needed to build a robust domestic battery supply chain that is Made-in-America.

Batteries are a crucial element in the transition to a clean energy economy, reducing energy costs for American families and businesses while curbing harmful greenhouse gas emissions. They are essential for national competitiveness, supporting grid storage, ensuring the resilience of homes and businesses, and facilitating the electrification of the transportation sector. With the demand for electric vehicles and stationary storage expected to surge, it is imperative for the United States to invest in the capacity to expedite the development of a resilient supply chain for high-capacity batteries, including non-lithium batteries.

This funding opportunity marks the second phase of the $6 billion total provided by the Bipartisan Infrastructure Law. The initial phase saw DOE awarding fifteen projects catalyzing over $5.8 billion in public/private investment. The focus of this second phase is to bolster domestic battery manufacturing and supply chains, achieving key objectives such as ensuring a competitive battery materials processing industry, expanding advanced battery manufacturing capabilities, and enhancing national security by reducing reliance on foreign entities.

The funding also prioritizes delivering substantial benefits for American workers. Emphasizing collective bargaining agreements and high-quality, high-wage hourly production workforce creation, the funding opportunity aligns with the Justice40 Initiative’s goal of directing 40% of overall benefits to underserved and overburdened communities, providing workforce opportunities to low- and moderate-income communities.

This second phase places a strong emphasis on next-generation technologies and battery chemistries, extending beyond lithium-based technologies. New focus areas include precursor production and manufacturing for specialized, non-light duty markets. The DOE is actively seeking projects that increase the separation of battery-grade critical materials, expand production facilities for cathode and anode materials, and enhance battery component manufacturing facilities. All these processes are exactly what would boost the American market’s competitiveness globally.

The program’s future iterations will adapt approximately every six months to account for market and technology evolution.

A significant step forward, albeit slightly late

There is no doubt the US and even the EU are seriously lacking in progress, volume and innovation compared to Asia in the battery development front. We have mentioned in a previous article that the global Li-ion batteries demand projection to 2030 shows a constantly increasing trend. If the US and the EU want to compete against Asia, they need to invest in new technologies, research and infrastructure. This announcement seems to be a step towards the right direction.