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DOE awards $2.8B to boost EV mineral production

The Biden administration on Wednesday announced $2.8 billion in grant awards to support domestic electric vehicle battery production and a new initiative to secure a “reliable and sustainable supply” of EV minerals.

“Together, these actions will improve America’s energy independence, strengthen national security, support good-paying jobs across battery supply chains, and lower costs for working families,” according to a fact sheet on the program.

Grants for battery production: DOE announced that $2.8 billion in grant funding from the infrastructure law has been awarded to 20 manufacturing and processing companies, leveraging more than $9 billion including private sector investments to boost domestic production of EV batteries. The money is intended to help develop enough battery-grade lithium to supply about 2 million EVs a year, plus enough battery-grade graphite for 1.2 million EVs and enough battery-grade nickel for 400,000 EVs a year, according to the administration.

The funding will also support the installation of the first large-scale, commercial lithium electrolyte salt production facility and the first lithium iron phosphate cathode facility in the United States.

“What this is is the start of a battery supply chain industry,” said Ben Steinberg, executive vice president of lobbying firm Venn Strategies, six of whose clients won awards as part of Wednesday’s announcement. He said automakers and large cell makers had already committed to developing electric cars, but “what we don’t have here is the supply chain, the chemical processing, the mining, the recycling.”

The grants represent about half of a $6 billion pot of money in the infrastructure law for battery material manufacturing and recycling.

The American Battery Material Initiative: The Biden administration also launched a “whole-of-government effort to secure a reliable and sustainable supply of the critical minerals that power everything from electric vehicles to homes to defense systems.” The initiative will be led by a White House steering committee and coordinated by DOE with support from the Department of the Interior.

Wednesday’s announcement builds on a February 2021 executive order that launched a supply chain review that recommended a “mineral-by-mineral approach” to expanding sustainable domestic production and working with allies to diversify international supply chains.

Context: Three recently enacted pieces of legislation — the Bipartisan Infrastructure Law, the CHIPS & Science Act, and the Inflation Reduction Act — will invest more than $135 billion combined in electric vehicle capacity, including mineral sourcing and processing and battery manufacturing.

According to the White House, these actions have already resulted in “a domestic battery manufacturing boom, with companies announcing over $100 billion in EVs, battery and EV charging investments right here in the United States.”

The Biden administration also invoked the Defense Production Act to secure U.S. production of lithium, nickel, cobalt, graphite and manganese for EV production.

Biden has set a goal for electric vehicles to make up half of all new vehicles sold in the United States by 2030.

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