Both public and private funding for battery production in the US has exploded, accelerated by the passage of the Inflation Reduction Act earlier this year, which provides incentives for electric vehicles. Under requirements in the new electric vehicle tax credits, battery components must be sourced and manufactured in the United States or its free trade partners. But much of the investment in battery manufacturing to date has been focused on later stages in the supply chain, particularly in factories that make batteries for electric vehicles.
The new spending is an effort to build earlier parts of the supply chain so that the materials that go into batteries can also be manufactured or sourced locally. Producing battery precursors in the US can help reduce costs for new technologies and ensure a steady supply of batteries, as well as establish new companies and create jobs.
This funding is a step towards “building the foundation of the domestic battery industry” Jonas Nahman assistant professor of energy, resources and the environment at Johns Hopkins, said in an email.
Manufacturing plants worth billions of dollars for batteries and electric vehicles are popping up all over the country. But earlier parts of the supply chain still relied heavily on Asia, especially China, which made up the vast majority has global capabilities in mineral processing and electrode manufacturing.
This funding announcement reflects an effort by the United States to catch up, particularly to deal with the minerals used to make batteries. Four of the projects that received the funding were companies working to extract and process lithium, a metal important for lithium-ion batteries. The supply of lithium may need 20 times increase from now to 2050 meet needs. Lithium production represents “one of the vulnerable parts of the supply chain,” says Nahm.
Another important focus seems to be on the production of lithium-iron phosphate (LFP) batteries, a lower-cost chemical. LFP batteries differ from other lithium-ion batteries in that they do not contain nickel or cobalt, two expensive metals that may be limited in the coming decades.
LFP technology could become an important part of the battery market in the next few decades, potentially accounting for 40% of global supply by 2030, According to some analysts. And the United States has not historically been the center of LFP battery production, say Evelina Stoikouan energy storage link at BloombergNEF.
While most projects focus on batteries today, a few grants will fund technologies that are not yet widely used. Including silicon based anodecan increase the energy stored in the lithium-ion battery.