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Biden Administration Announces Grant Program for Domestic Production and Recycling of EV Battery Components

Acknowledging the vast material inputs required to power the EV revolution in the context of the push towards net zero carbon — as well as the significant supply chain challenges associated with the sought-after shift — the Biden Administration has announced a $3.1 billion funding program for U.S. companies producing and recycling lithium-ion batteries.

According to Secretary of Energy Jennifer Granholm, the move to provide grants to companies that can create new, retrofitted or expanded processing facilities as well as battery recycling programs will further the Biden Administration’s aspiration that 50 percent of all vehicles sold in America by 2030 be electric while strengthening U.S. energy independence.

The funds, which account for almost half of the $7 billion approved for domestic battery supply chain improvements in the 2021 infrastructure law, will be released via grants to as many as thirty companies which will be required to match them on a 50-50 basis.

Abigail Wulf, vice president of critical minerals strategy at the non-partisan advocacy group SAFE said: “The United States is finally getting into the global battery race and broader race for the future,” adding that “[i]t’s now up to DOE to get the money out the door to projects that will make us stronger in the short- and long-term.”

The move ties into a broader push by the Biden Administration to strengthen critical mineral supply chains, and follows on the heels of a March 31 presidential determination to invoke the Defense Production Act to shore up domestic production of the critical minerals required to manufacture EV batteries.

However, mining expert Debra Struhsacker, co-founder of the Women’s Mining Coalition, has pointed to “mixed signals” sent by the Biden Administration about “whether it is really serious about extracting critical minerals from U.S. mines,” arguing that “on the same day the president made his Defense Production Act announcement, the Department of the Interior published a Federal Register notice to begin a process to change mining laws and regulations in ways that could make it harder and more expensive to develop critical minerals and put lands off-limits to mining.”

As National Mining Association president and CEO Rich Nolan said in response to the presidential determination invoking the DPA earlier this spring:

“The minerals supply chain that will drive the electrification of our transportation sector and the energy transition is not only at risk from a perilous and growing import dependence, but the approaching minerals demand wave is set to strain every sector of the economy and requires an urgency in action from government and industry never before seen. Unless we continue to build on this action, and get serious about reshoring these supply chains and bringing new mines and mineral processing online, we risk feeding the minerals dominance of geopolitical rivals. We have abundant mineral resources here. What we need is policy to ensure we can produce them and build the secure, reliable supply chains we know we must have.”

Recent actions taken by the Administration to strengthen domestic supply chains thus far are important steps towards greater mineral resource independence – but they must be embedded into the context of a comprehensive and unambiguous “all of the above” approach across the entire value chain.  As we like to say at ARPN, “supply chain” begins with… supply.