Following the Biden Administration’s prohibitive taxation of Chinese-made EVs, the US Department of Energy (DOE) has announced more than $3 billion in funding for 25 projects across 14 states, targeted at increasing the local production of advanced batteries and battery materials. The move supports the government’s Inflation Reduction Act, which aims to remove dependence on China for battery production and critical minerals – in exchange for federal tax credits, ergo, lower prices that have been proven to boost EV adoption in America.
The selected projects are to be administered by DOE’s Office of Manufacturing and Energy Supply Chains (MESC). They will retrofit, expand, and build new domestic facilities for battery-grade processed critical minerals, battery components, battery manufacturing, and recycling – keeping the EV supply chain local while creating jobs in the process.
“The Biden-Harris administration is using every available tool to onshore and friend-shore the supply chain for EVs and batteries, working with our allies and partners, for the benefit of our national security, our economy, and our planet.”
– John Podesta, senior advisor to President Biden for International Climate Policy.
Investing In America
There’s a long list of companies that will be awarded with the grant, but the bottomline is, the MESC has identified the gaps and growth opportunities across America’s energy supply chains, from raw materials to processing and manufacturing. These include building and expanding commercial-scale facilities to extract and recycle critical minerals including lithium, graphite, silane, and manganese – most of which are still sourced from China.
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Of note, the investment doesn’t exclusively cover lithium-ion batteries. In a statement, White House climate adviser Ali Zaidi said that mineral security sets the US up for the next generation of battery technologies, including solid-state batteries – a race wherein China claims to be winning – and other types the world has yet to see. Current EV battery technology is still expensive, so it’s critical to develop the cheapest, most viable ones that won’t break the bank to keep EV prices at bay.
Creating Local Jobs
Apart from strengthening local battery supply chains across the US and strengthening national security, the Biden-Harris Administration’s latest investment is projected to support over 8,000 construction jobs and over 4,000 operating jobs. More than half of the projects selected signed a Project Labor Agreement commitment, while 10 have an agreement with labor or a neutrality pledge.
According to the DOE, nearly 90% of the selected projects are located in or adjacent to disadvantaged communities, further supporting the government’s aim to have 40% of overall benefits flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.
