U.S. Department of Energy announces $3.1B in funding for battery production

Riley Beggin
The Detroit News

Washington — The U.S. Department of Energy announced Monday it would distribute more than $3.1 billion in matching grants for electric vehicle battery manufacturing and processing. 

The funding, appropriated through the bipartisan infrastructure law passed last year, could go to a wide variety of domestic battery projects such as revamping factories to build batteries or mineral processing for use in batteries. 

Assembled batteries wait to be installed inside Ford F-150 Lightning EVs at the Ford Rouge Electric Vehicle Center in Dearborn.

The agency is also announcing a separate $60 million grant program for battery recycling projects.

"This will help to underwrite the private investment we need in the U.S. to build reliable industrial capacity and, for the first time, have a domestic end-to-end supply chain in electric vehicles and electric vehicle production," National Economic Council director Brian Deese told reporters Monday.

The Energy Department estimates 16 to 30 projects will be funded through the grant program, depending on the applications they receive from private companies.

 The grant money will come from $7 billion appropriated through the infrastructure law for bolstering the battery supply chain, White House National Climate Advisor Gina McCarthy said. 

The announcement comes after President Joe Biden said in late March that he would use the Defense Production Act to spur production of critical battery minerals such as lithium, nickel, cobalt, graphite and manganese.

As automakers ramp up plans to produce electric vehicles, demand for those critical minerals is skyrocketing. While the U.S. does produce some of these minerals, it has little power to process them into what's needed for batteries. In comparison, China controls around 80% of critical mineral processing power around the world. 

Asked how the administration can guarantee that the grant funding will go to American companies rather than other companies that are directly or indirectly owned by Chinese companies, given their domination in the market, McCarthy said projects in Michigan and Nevada could be good options for government investment.

“There are opportunities to expand innovations in supply chains in Michigan we already know are available and we can help our automakers increase demand for safer and cleaner vehicles there," she said.

U.S. Secretary of Energy Jennifer Granholm discusses the funding from the bipartisan infrastructure law to boost domestic battery manufacturing and supply chains during a press conference Monday at Focus: HOPE in Detroit.

Energy Secretary Jennifer Granholm touted the investment during a visit to Michigan Monday that included a stop in Detroit.

“Positioning the United States front and center in meeting the growing demand for advanced batteries is how we boost our competitiveness and electrify our transportation system,” Granholm said in a statement.

The funding announcement also comes as conservative Democrat Sen. Joe Manchin of West Virginia, a crucial vote in passing any Biden administration climate priorities, has repeatedly raised concerns about government support for electric vehicles while the mineral supply chain remains largely under China's control. 

Biden has said he wants half of all new vehicles sold in the U.S. to be electric by 2030 and has been pushing policies that would accelerate the transition to electric vehicles since coming into office, including directing federal agencies to buy only zero-emission light-duty vehicles by 2027 and only zero-emission vehicles fleetwide by 2035. 

rbeggin@detroitnews.com

Twitter: @rbeggin

Associated Press contributed.