Department of Energy boosts home battery supply chain with billions in funding

The Department of Energy (DOE) opened billions of dollars in funding today to build household supply chains for batteries. Batteries will be crucial in the Biden administration’s plans to transition the country to electric vehicles and clean energy.

The DOE says in its announcement that it will give $3.1 billion to companies to drive “the creation of new, retrofitted and expanded commercial facilities” to process materials, manufacture batteries and recycle them at the end of their lives. Another $60 million in DOE grants will fund efforts to find a second use for old EV batteries. The money comes from the Bipartisan Infrastructure Law that was passed last year.

The bigger picture: The Biden administration has set pretty big goals for clean energy and transportation in the US. He has committed the US, under the Paris climate accord, to halving its greenhouse gas emissions this decade. To do this, the government wants the electric grid to run completely on carbon-free energy by 2035 and to ensure that half of all new car sales are electric or hybrid vehicles by the end of the decade.

That kind of future depends on having battery technology to make electric vehicles more affordable, as well as storing wind and solar energy so it’s available when sunlight and winds subside.

Without taking action, a DOE analysis last year found that US battery production capacity would not be able to meet even half of the projected demand for lithium-ion batteries for electric vehicles in 2028. At the moment, battery supply chains are especially vulnerable because they are concentrated in just a few countries. This has led to allegations of labor abuse, such as a lawsuit against Tesla and other companies for the death of child workers.

Today’s announcement is just the latest in a series of steps the Biden administration has taken to get its hands on more (and better) batteries. In March, Biden invoked the Defense Production Act to bolster domestic mining and processing of minerals such as nickel, lithium, cobalt, graphite and manganese, vital for battery manufacturing. Last June, the Department of Energy released a “national plan” for the manufacture of lithium batteries. In all, the Bipartisan Infrastructure Act includes $7 billion for household battery supply chains – from collecting raw materials to manufacturing battery cells and recycling them at the end of their lives.

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