US grants $2.8bn to boost the production of EV batteries

The United States has announced it will award $2.8bn (£2.5bn) in grants to boost the US production of electric vehicle batteries and the minerals used to build them in 12 states. 

The grants mark the latest push by the Biden administration to help reduce the country’s dependence on China, a country that currently produces 75 per cent of the batteries used in electric vehicles, according to officials. 

“This is critically important, because the future of vehicles is electric,” Biden said at a White House event with Energy Secretary Jennifer Granholm.“By undercutting US manufacturers with their unfair subsidies and trade practices, China seized a significant portion of the market. Today we’re stepping up… to take it back, not all of it, but bold goals.”

The funding recipients, first reported by Reuters, were chosen by a White House steering committee and coordinated by the Energy Department with support from the Interior Department.

Granholm called the funding announcement “huge” news that would allow the United States to “make battery materials and components here at home that we currently import” from China and other countries. 

Albemarle Corp is among the 20 manufacturing and processing companies receiving the US Energy Department grants. The company is set to be awarded $149.7m (£133.2m) to build a facility in North Carolina that will lightly process rock containing lithium and feed it to a separate US plant in order to double the company’s lithium production for EV batteries.

Albemarle said the grant “increases the speed of lithium processing and reduces greenhouse gas emissions from long-distance transportation of raw minerals.”

Piedmont Lithium Inc was awarded $141.7m (£126m) million to build its own lithium processing facility in Tennessee, while Talon Metals Corp will receive $114.8m (£102.1m) to build a processing plant in North Dakota. Other grants of varying amounts have been awarded to Ascend Elements, Cirba Solutions and Syrah Technologies. 

The companies selected for the grants will be required to match the federal investment, leveraging an estimated $9bn (£8bn) to boost clean energy technology, create good-paying jobs and support Biden’s goal for electric vehicles to make up half of all new vehicle sales by 2030, the White House said.

Ryan Melsert, CEO of American Battery Technology in Reno, Nevada, told Biden that US intervention in the battery market was overdue.

“Unfortunately, the US is almost a non-player in the lithium game,” Melsert said, noting that less than 1 per cent of lithium products globally are made in the US.

Katherine García, director of the Sierra Club’s clean transportation campaign, also applauded the Biden administration’s action, which she said would bolster the EV supply chain and cut vehicle pollution.

“Our nation’s transition to electric vehicles must be one delivered with strong standards that invest in communities, especially those overburdened by pollution. Today’s announcement does just that,” she said.

The federal grants announced Wednesday are funded by last year’s $1tn (£890bn) infrastructure law and are separate from an executive order Biden issued last spring invoking the Defense Production Act to boost the production of lithium and other critical minerals used to power electric vehicles.

Under the US government strategy, 50 per cent of all new vehicles sold in the United States are to be electric or plug-in hybrid electric models. Biden has also supported the building or 500,000 new EV charging stations but has not endorsed the phasing-out of new gasoline-powered vehicle sales by 2030.

The sweeping climate and healthcare law passed in August also includes several provisions to boost electric vehicles, including tax credits for EV buyers worth up to $7,500 (£6,681).