U.S. Pledges $3.5 bn Investment to Bolster Battery Production

By Editor


The U.S. Department of Energy has unveiled a landmark $3.5 billion initiative aimed at fortifying domestic battery production and materials, a pivotal step propelled by the infrastructure law endorsed by President Joe Biden in 2021.

This substantial funding is geared towards amplifying the manufacturing capacity of batteries and fortifying supply chains. The focus extends to expanding facilities within the country for critical minerals, cutting-edge technologies, and the advancement of lithium-based innovations, among other critical areas.

U.S. Secretary of Energy Jennifer Granholm emphasized the strategic significance of positioning the United States at the forefront of satisfying the escalating demand for advanced batteries. Jennifer Granholm underlined the broader objectives, including enhancing global competitiveness, fostering high-quality employment opportunities, and fortifying the foundation of the clean energy economy.

The backdrop for this initiative is China’s predominant status in the global electric vehicle (EV) battery supply chain. Recent actions, such as China’s imposition of limits on the anode material graphite in October, have fueled uncertainties within this pivotal sector.

Highlighting the urgency, two Democratic U.S. senators articulated the imperative need for the Energy Department to undertake measures that amplify U.S. battery manufacturing  capabilities and drive research into next-generation battery technologies. Their sentiments stemmed from concerns over China’s dominance in this sphere and its imposition of export controls, as revealed in a letter reviewed by Reuters earlier this month.

The substantial investment and strategic focus underscore the nation’s commitment to fostering self-sufficiency in critical industries, fortifying national security, and propelling the transition towards a sustainable and technologically robust future.

A report from IEA (International Energy Agency) said automotive lithium-ion (Li-ion) battery demand increased by about 65 percent to 550 GWh in 2022, from about 330 GWh in 2021, primarily as a result of growth in electric passenger car sales, with new registrations increasing by 55 percent in 2022 relative to 2021.

In China, battery demand for vehicles grew over 70 percent, while electric car sales increased by 80 percent in 2022 relative to 2021, with growth in battery demand slightly tempered by an increasing share of PHEVs.

Battery demand for vehicles in the United States grew by around 80 percent, despite electric car sales only increasing by around 55 percent in 2022.

While the average battery size for battery electric cars in the United States only grew by about 7 percent in 2022, the average battery electric car battery size remains about 40 percent higher than the global average, due in part to the higher share of SUVs in US electric car sales relative to other major markets, as well as manufacturers’ strategies to offer longer all-electric driving ranges.

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