US unveils up to US$3.5bn funding to expand domestic battery manufacturing

THE White House has announced up to US$3.5bn in funding to strengthen domestic battery manufacturing as part of President Biden’s Investing in America agenda. 

Batteries are seen as a critical part of the transition to a clean energy economy. However, China dominates the global electric vehicle battery supply chain. A key driver in that is their world-leading refinery capacity when it comes to critical components like cobalt, nickel sulphate, lithium hydroxide, and graphite.  

Graphite is used in EV battery anodes, the negatively charged portion of a battery, but limits recently imposed by China have fuelled uncertainty in supply chains.  

Beijing has also imposed similar restrictions on gallium and germanium – two key metals used primarily in the production of semiconductors and solar panels. 

Added to the restriction worries is the global demand for lithium batteries, which is expected to surge more than five-fold by 2030 as countries push to reach net zero.  

By closing the gap in supply chain disruptions and accelerating domestic battery production, the US will be less reliant on imports, said Jennifer M Granholm, the country’s secretary of energy. “Positioning the United States front and centre 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.”  

The US$3.5bn funding is being allocated from the Bipartisan Infrastructure Law – the same act that recently allocated up to US$7bn for seven hydrogen hubs. It is the second round of funding to boost domestic production of advanced batteries and battery materials nationwide.  

The first, announced last year, allocated US$3bn to 15 projects, including companies that mine critical minerals like nickel, used in lithium batteries.  

In this next round, the Department of Energy (DOE) is prioritising next-generation technologies and battery chemistries, in addition to lithium-based technologies. It is also calling for projects that will increase separation of battery-grade critical materials, expand production facilities for cathode and anode materials production, and expand battery component manufacturing facilities. 

The DOE is also aiming to recover rare earth elements (REEs) and critical minerals needed for clean energy technologies, by extracting and separating them out from the billions of tons of coal waste and ash produced by mining across the US.  

When REEs are mined within the US, they are then shipped overseas for processing, before being sold back in more expensive products. The new facility, which is supported by a US$140m investment, and hailed as a first-of-its-kind facility, will not only reduce new mining projects, but will also bypass the need to refine waste abroad.