Department of Energy to spend $3 billion on battery production to meet Biden's electric vehicle goal

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The Department of Energy on Monday announced more than $3 billion in funding to bolster supply chains and expand domestic production of advanced batteries in an effort to meet President Biden’s goal of having electric vehicles make up half of all vehicle sales in America by 2030.

The Department of Energy announced $3.1 billion on Monday in funding from the Bipartisan Infrastructure Law to make more batteries and components in the United States. The funding, according to administration officials, will also go toward bolstering domestic supply chains, which they say will help to create jobs and lower costs for families.

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The investment is set to support the creation of "new, retrofitted, and expanded commercial facilities as well as manufacturing demonstrations and battery recycling."

Energy Secretary Jennifer Granholm speaks during a press briefing at the White House, Nov. 23, 2021, in Washington, D.C. (AP Photo/Evan Vucci, File)

The Department of Energy also announced a separate $60 million to support second-life applications for batteries that had once been used to power electric vehicles. The funding will also help to support "new processes for recycling materials back into the battery supply chain."

"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," Energy Secretary Jennifer Granholm said Monday. "President Biden’s historic investment in battery production and recycling will give our domestic supply chain the jolt it need to become more secure and less reliant on other nations—strengthening our clean energy economy, creating good paying jobs, and decarbonizing the transportation sector." 

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Administration officials expect the global lithium-ion battery market to grow "rapidly" over the next decade, and said the Department of Energy is working with industry to prepare the U.S. for increased market demand.

According to the Department of Energy, by the end of March, more than 2.5 million plug-in electric vehicles had been sold in America. The department said that "responsible and sustainable domestic sourcing of the critical materials used to make lithium-ion batteries—such as lithium, cobalt, nickel, and graphite—will help avoid or mitigate supply chain disruptions and accelerate battery production in America to meet this demand and support the adoption of electric vehicles."

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Administration officials said Monday that the investments are "key components" of the Biden administration’s "whole-of-government" supply chain strategy to "strengthen America’s energy independence to reduce our reliance on competing nations and support the president’s goal to have electric vehicles make up half of all vehicles sales in America by 2030.

The Bipartisan Infrastructure Law directs more than $7 billion to strengthen the U.S. battery supply chain, which includes producing and recycling critical minerals without new extraction or mining and sourcing materials for domestic manufacturing.

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The law also includes $7.5 billion for electric vehicle chargers, $5 billion for electric transit buses, and $5 billion for clean and electric school buses.