Biden Administration Begins $3 Billion Plan for Electric Car Batteries

Source: By Lisa Friedman, New York Times • Posted: Tuesday, May 3, 2022

The Biden administration is planning a major shift to electric vehicles, but experts say it requires a secure, resilient supply of critical minerals.

The new programs will be funded through the $1 trillion infrastructure law, which includes more than $7 billion to improve the domestic battery supply chain.
Michael M. Santiago/Getty Images

The Biden administration plans to begin a $3.1 billion effort on Monday to spur the domestic production of advanced batteries, which are essential to its plan to speed the adoption of electric vehicles and renewable energy.

President Biden has prodded automakers to churn out electric vehicles and utilities to switch to solar, wind and other clean energy, saying the transitions are critical to eliminating the pollution that is dangerously heating the planet.

In the wake of surging energy prices caused largely by Russia’s invasion of Ukraine, administration officials also have described the transition to clean energy as a way to insulate consumers from the fluctuation of global oil markets and achieve true energy independence.

Jennifer Granholm, the energy secretary, last week called renewable energy “the greatest peace plan this world will ever know.”

Yet currently, lithium, cobalt and other minerals needed for electric car batteries and energy storage are processed primarily in Asia. China alone controls nearly 80 percent of the world’s processing and refining of those critical minerals.

Senator Joe Manchin III, Democrat of West Virginia, a crucial vote for potential climate legislation in the evenly divided Senate, said last month that he had “grave concerns about moving toward an E.V.-only future” because China controls the minerals needed for car batteries.

“We cannot replace one unreliable foreign supply chain with another and think it’s going to solve our problems,” he said at an April 7 hearing of the Senate Energy and Natural Resources Committee.

Ms. Granholm plans to announce the funding plan on Monday during a visit to Detroit, a senior administration official said. The $3.1 billion in grants, along with a separate $60 million program for battery recycling, is an effort to “reduce our reliance on competing nations like China that have an advantage over the global supply chain,” according to a Department of Energy statement.

The funding is aimed at companies that can create new, retrofitted or expanded processing facilities as well as battery recycling programs, officials with the Department of Energy said. The grants will be funded through the $1 trillion infrastructure law, which includes more than $7 billion to improve the domestic battery supply chain.

In April, President Biden invoked the Defense Production Act to give the government more avenues to provide support for the mining, processing and recycling of critical materials, such as lithium, nickel, cobalt, graphite and manganese.

The move comes in an election year when Republican leaders in Congress are blaming high gas prices on the Biden administration’s pursuit of renewable power — a claim that most economists say is not true.

Achieving widespread electrification, however, will require major federal investment. A June report from the Energy Department said there was “a real threat that U.S. companies will not be able to benefit from domestic and global market growth” for batteries, and that “the U.S. risks long-term dependence on foreign sources of batteries and critical materials.”

Independent experts and industry officials relayed similar concerns at a recent congressional hearing before the House Committee on Science, Space and Technology.

“Although the demand for E.V.s is robust, market penetration will be limited by supply chain constraints,” Chris Nevers of Rivian Automotive Inc., an electric vehicle manufacturer, told lawmakers.

Mr. Nevers said the United States had the mineral resources and industrial capability to create a fully domestic electric vehicle battery supply chain, but it would take a huge “all of the above” mobilization of the federal government to make it happen.

Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science at Argonne National Laboratory, told the panel that the United States “can become a dominant force in energy storage technology” and has a “once-in-a-lifetime opportunity to seize the moment.”

Between electric vehicles and grid storage, the market for lithium-ion batteries in the United States is expected to increase by a factor of 20 to 30 in the next decade but a secure domestic supply chain is needed, Dr. Srinivasan said.

The Biden administration wants half of all new vehicles sold in the United States to be electric by 2030. The president also has issued procurement guidelines to transform the 600,000-vehicle federal fleet, so that all new cars and trucks purchased by the federal government by 2035 are zero-emission.

 

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