The Department of Energy on Friday announced $3 billion for projects to bolster the electric vehicle and grid battery supply chain, from mining to recycling.
The 25 projects target one of the biggest challenges facing battery manufacturing: China’s dominance over raw materials and metals needed to build clean energy projects. The grants support retrofits and construction of domestic facilities for mining and battery production and reuse.
“These investments are going to help battery manufacturers meet the growing demand for U.S.-made [electric vehicles] and to help our grid store the record new amounts of wind and solar that are coming online,” Energy Secretary Jennifer Granholm told reporters Thursday.
The funding draws from $7 billion authorized in the 2021 bipartisan infrastructure law to boost domestic battery projects. It’s the second round of awards from the funding, which focuses on projects with a price tag of several hundred million dollars.
In 2022, DOE announced 21 projects for the first round of tentative awards. That number ultimately fell to 14 projects valued at $1.82 billion.
The Biden administration and Democrats have tried to boost clean energy manufacturing and production through the infrastructure law and 2022 Inflation Reduction Act, which provides tax credits for domestically-produced batteries, including for electric vehicles .
Republican presidential candidate Donald Trump and Republican allies in Congress are pledging to repeal parts of the IRA if they win at the polls in November.
Despite receiving federal funding, the U.S. battery and EV sectors face stiff obstacles, partly because of China’s global stranglehold on critical mineral extraction and processing.
That’s led the Biden administration to slap a range of tariffs on Chinese minerals and clean energy goods like solar panels. According to reporting from POLITICO, DOE is also considering a price support program for U.S. mineral production.
DOE said the new projects, which are located in 14 states, will provide roughly 12,000 jobs. Two-thirds of those are in construction.
Some are in coastal states like Louisiana, South Carolina and Washington. Other projects are in the Midwest and West, including in battleground states like Arizona and Michigan.
Granholm emphasized the private sector investment that is spurred by federal grants. She said U.S. companies have announced more than $120 billion in investment in batteries since President Joe Biden took office.
In a statement, Abigail Hunter, executive director of the nonprofit SAFE’s Center for Critical Minerals Strategy, called it a “much-needed investment,” adding that U.S. battery production “will define our future competitiveness and energy security.”
DOE said more than half the selected projects signed a labor agreement commitment. Nearly 90 percent of awards “are located in or adjacent to disadvantaged communities,” it said.
The projects must undergo environmental review and a negotiation process with DOE before being finalized.
New extraction projects
A portion of the funding looks to boost production of critical minerals that have emerged as supply chain bottlenecks for electric vehicles, renewables and defense applications.
Some grants increase production of lithium, a silvery-white metal used to make lithium-ion batteries, which are commonly used in EVs and on the grid. Today, the nation has one operating lithium mine in Nevada, the Silver Peak mine.
Among the recipients are companies wanting to use technologies to extract lithium from brine. SWA Lithium, a joint project between Standard Lithium and Equinor, received $225 million to move forward with a commercial-scale direct lithium extraction project in Arkansas’ Smackover Formation, an emerging hub where oil companies are eyeing brine resources as a source of the critical mineral.
A separate $225 million grant was awarded to TerraVolta Resources, which is poised to use direct-lithium extraction technology in the Texarkana region.
The grants will also benefit lithium processing projects. Albemarle received $67 million to retrofit a facility to make lithium anode batteries in North Carolina.
The funding announcement marks a boost for the first critical minerals project the Biden administration opted to fast-track through a special permitting process. DOE awarded a $166 million grant to South32 Hermosa, which is building a $1.7 billion underground manganese and zinc mine and processing plant in southern Arizona.
The Biden administration last year designated the Hermosa project to receive an expedited federal permitting review through a process laid out under legislation dubbed FAST-41 that was signed into law in 2015 during the Obama administration.
Pat Risner, president of South32 Hermosa, said in a statement that the company is pursuing a “state-of-the-art, commercial scale battery-grade manganese production facility.”
“This project has the potential to provide a reliable, lower carbon and cost-effective domestic option for manganese products within the electric vehicle battery supply chain that currently relies entirely on foreign imports,” he said.
Carbon dioxide, graphite and iron
Another project is focused not on solid materials, but silane gas, a key precursor to silicon anodes — an alternative to graphite — used in lithium-ion batteries. China is the biggest source of silane today, according to a DOE release.
Group14 Technologies intends to use a $200 million grant to build a factory next to its existing facility in Moses Lake, Washington, which is already the country’s leading producer of silane gas.
Other funds will go toward projects boosting production of graphite.
DOE awarded $150 million to SKI US, which is building a synthetic graphite production plant in South Carolina. Another company, Urbix, was awarded a $124 million grant to build a plant to produce anode-grade coated spherical purified graphite in Muscle Shoals, Alabama.
Other projects support newer battery technologies or aim to assist in the battery production process generally.
Mitra Chem, for example, got a $100 million grant to support lithium-iron batteries — a cheaper though less dense version of lithium-ion technology.
Dow Chemical, the industrial giant, is slated to get $100 million to create a plant on the Gulf Coast intended to use waste carbon dioxide to make carbonate solvents, a class of material that improves battery function.
A history of challenges
Many mining and battery projects have struggled to progress in the U.S. As part of its first round of awards for the battery grant program, DOE abandoned talks last year with Microvast after months of Republican allegations that the company is tied to China. Talks also fell through with Lilac, Syrah, Piedmont and Amprius.
Piedmont Lithium was awarded a $142 million federal grant from DOE in 2022 to build mining and processing projects in the U.S. but later opted not to use the money and instead pivoted toward a potential loan guarantee. Considering weak lithium prices and inflation, Piedmont has said it’s still deciding when to submit an application for that funding.
Battery producer Amprius abandoned talks with DOE last year on a $50 million grant, saying in a press release at the time that the decision gives the company “significantly more operational flexibility in scale, vendor and supply chain management, product portfolio development and speed.”
On a call Thursday with reporters about the announcement, a senior DOE official who spoke on background said it’s “completely normal for us to have some percentage of companies withdraw or not proceed” in grant negotiations. The official cited potential problems with project scope and siting.
This story also appears in Climatewire.
Correction: A previous version of this story said round one awards talk fell through with Orbia. The Department of Energy awarded a grant to Koura, which is part of Orbia.
