Biden Administration Greenlights $3.5B for US Battery Sector Amid Growing EV Demand

As the popularity of electric vehicles increases, the need for technology to support them does in tandem. Advanced semiconductors that handle tasks like power switching and driver assist programs are critical. However, increasing battery capacity to support EV production worldwide is even more significant.

As part of a broader effort to support the adoption of EVs, the Biden administration and the U.S. Department of Energy (DOE) recently announced $3.5 billion in grants to advance the production of batteries and battery materials in the country. The funding will go towards building new battery production facilities, retrofitting outdated ones, and improving cell and battery pack manufacturing.  

In a statement, US Secretary of Energy Jennifer M. Granholm said, “Positioning the United States front and center to meet the growing demand for advanced batteries is how we boost our global competitiveness, maintain and create good paying jobs, and strengthen our clean energy economy.”

Batteries Needed

Batteries play a central role in the transition to clean energy that is being pursued by many countries around the globe. While electric vehicles are a large part of this transition, batteries are also crucial for applications like power storage to utilize clean energy sources more efficiently. By the end of the decade, The U.S. government projects that the lithium battery market will grow to five to ten times its current size. As such, advancements in battery materials, technology, and production will play a central role.

Notably, the $3.5 billion in new funding is the second phase of the administration’s Bipartisan Infrastructure Law. Grants awarded during this phase are prioritized toward applicants exploring next-generation battery technology and chemistries.  

In a DOE statement, other priorities include “projects that will increase separation of battery grade critical materials, expand production facilities for cathode and anode materials production, and expand battery component manufacturing facilities.”

The program also seeks to support traditionally underserved communities and create new workforce opportunities in low- to moderate-income areas. More importantly, a focus is placed on creating jobs—specifically positions with high wages and collective bargaining agreements to keep workers safe and satisfied.

This new round of funding for the EV industry will be a critical push toward its lofty goals. The Biden administration has previously announced its intentions to make electric vehicles account for half of all new light-duty vehicle sales by 2030. A shift of this nature demands a robust battery supply chain domestic to the United States. Funding research into new battery technologies and manufacturing will give the country an advantage in the coming years as the importance of batteries grows.

Applications for the latest round of grant funding are due in March, so it will be some time before the full implications of the $3.5 billion in funding are known. However, this is an exciting development to monitor as it will surely lead to impactful breakthroughs and new developments for the U.S. battery sector and the EV market.