The Department of Energy (DOE) opened up billions of dollars in funding today to build national supply chains for batteries. Batteries will be crucial in the Biden administration’s plans to transition the nation to electric vehicles and clean energy.
The DOE says in its announcement that it will award $3.1 billion to companies to encourage “the creation of new, modernized and expanded commercial facilities” to process materials, manufacture batteries and recycle them at the end of their lives. An additional $60 million in DOE grants will fund efforts to find a second use for old electric vehicle batteries. The money comes from the Bipartisan Infrastructure Act that passed last year.
The Big Picture: The Biden administration has set some pretty big goals for clean energy and transportation in the US It committed the US, under the Paris climate agreement, to halving its greenhouse gas emissions greenhouse this decade. To do that, the administration wants the power grid to run entirely on carbon-free power by 2035 and ensure that half of all new car sales are electric or hybrid vehicles by the end of the decade.
That kind of future depends on having the battery technology to make electric vehicles more affordable, as well as storing wind and solar power so it’s available when sunlight and winds die down.
Without taking action, a DOE analysis from last year found that US battery production capacity. it could not meet even half of the projected demand for lithium-ion batteries for electric vehicles in 2028. Right now, battery supply chains are especially vulnerable because they are concentrated in just a handful of countries. That led to allegations of labor abuses, such as a lawsuit against Tesla and other companies over the deaths of child workers.
Today’s announcement is just the latest in a series of steps the Biden administration has taken to get its hands on more (and better) batteries. In March, Biden invoked the Defense Production Act to boost domestic mining and processing of minerals such as nickel, lithium, cobalt, graphite and manganese, which are vital for making batteries. Last June, the Department of Energy published a “national plan” to manufacture lithium batteries. In total, the Bipartisan Infrastructure Act includes $7 billion for household battery supply chains, from raw material collection to battery cell manufacturing and end-of-life recycling.