The US has announced plans to build a domestic supply chain for lithium batteries, which are critical for electric vehicles and renewable energy. The new goal is to be able to do almost everything — from mining to battery manufacturing and recycling — within its borders by the end of the decade. If it fails, the US could struggle to meet its own needs climate goals and competing in the growing electric car industry.
The Department of Energy (DOE) has a “national blueprinttoday outlining how it plans to increase America’s ability to make lithium batteries. Ask for this batteries has already skyrocketed for electronics and electric vehicles. Refurbished power grids will also have major batteries to collect more and more solar and wind energy. In its blueprint, the DOE even advocates battery-powered aircraft to take to the skies.
At present, the US is a minor player in the global battery industry. China dominates both battery production and mineral supply chains. On its current trajectory, the US is expected to meet less than half of the projected demand for lithium-ion batteries for electric vehicles on the roads by 2028.
“These projections show that there is a real threat that US companies will not be able to capitalize on the growth of the domestic and global market,” the blueprint says. “Our supply chains for the transportation, utilities and aviation sectors will be vulnerable and obligated to others for key technologies.”
Much of what is holding the US back, according to the DOE, is a lack of a national strategy. So to turn things around, the DOE has laid out its priorities for federal investment in the technology this decade. One of the biggest issues to address is how to get enough key minerals. There is a threat of a shortage of lithium, cobalt and nickel used in batteries. To make matters worse, these things are only mined in a few places, and violations of labor and human rights are common. That makes finding new mineral resources and designing batteries that consume less of these materials is quite urgent.
There is already a race to tap lithium deposits in the US, and the DOE’s new blueprint is likely to accelerate domestic mining efforts. The DOE also called for recycling to be mandated so that battery manufacturers can ultimately extract more materials from old products. In the longer term, the DOE actually wants to find a way to make lithium-ion batteries without cobalt and nickel by 2030. (Tesla announced last year that it would make EV battery cathodes without cobalt). Ultimately, through better design, it aims to cut the cost of an EV battery pack in half by the end of the decade.
The DOE plans to provide $17 billion in loans for EV manufacturing facilities in the US. It also plans to deploy more large-scale energy storage at federal sites. And it has released new guidelines that require: federal contractors and beneficiaries to manufacture in the US the products they research and develop, including anything related to advanced batteries.
It’s part of a wider bid by the Biden administration to develop more domestic supply chains. In addition to lithium-ion batteries, they also target critical minerals, semiconductor chips and pharmaceuticals. The administration published a larger review of all those supply chains today and announced a new task force to stop supply chain disruptions. That task force is focused on finding short-term solutions after the COVID-19 pandemic exposed major weaknesses in global supply chains.
In the long run, the US will probably have to figure out how to make many more things on its own. The Biden administration will set aside $100 million in grants for state-level internship programs that will help create workforces for new domestic supply chains. “The decades-long focus on labor as a cost to be managed and not an asset to invest in has weakened our domestic supply chains,” National Economic Council deputy director Sameera Fazili said in a statement. briefing today. “These reports clearly show that we need to take action.”