White House to Boost Domestic EV Battery Production

Virtually all EV battery components are made abroad.

October 21, 2022

ALEXANDRIA, Va.—The Biden Administration will award $2.8 billion in grants to 20 manufacturing and processing companies across 12 states for projects to expand the production of electric-vehicle batteries, reports CNBC.

The grants will support projects that extract and develop more battery-grade lithium, graphite and nickel, as well as other materials used for batteries. All projects will develop enough lithium to supply over two million electric vehicles annually and establish significant domestic production of graphite and nickel, according to the White House.

The grants will also support the installation of the first large-scale commercial lithium electrolyte salt production facility in the United States, as well as an electrode binder facility capable of supplying 45% of the anticipated domestic demand for binders for EV batteries in 2030.

“Producing advanced batteries and components here at home will accelerate the transition away from fossil fuels to meet the strong demand for electric vehicles, creating more good-paying jobs across the country,” Energy Secretary Jennifer Granholm said in a statement.

The White House said that virtually all lithium, graphite, battery-grade nickel, electrolyte salt, electrode binder and iron phosphate cathode material are produced abroad, and China controls the supply chains for many of these key inputs.

The Associated Press reports that during the event, Ryan Melsert, CEO of American Battery Technology Co. in Reno, Nevada, told Biden that U.S. intervention in the battery market was overdue.

“Unfortunately, the U.S. is almost a non-player in the lithium game,″ Melsert said, noting that less than 1% of lithium products globally are made in the U.S.

Melsert said his company, which makes lithium hydroxide for battery cathodes, is changing that and so are the other grant recipients. “Vehicle manufacturers are really hungry to buy these materials from U.S.-based resources,″ he told Biden.

The 12 states receiving grants are Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee and Washington state. The companies that receive the grants must match the money given by the government. President Biden set a goal for electric vehicles to make up half of all new vehicles sold in 2030 electric.

The Inflation Reduction Act offers qualified consumers a tax credit of up to $7,500 on the purchase of an electric vehicle. However, to get the full amount, the EV must contain a battery made in North America, and 40% of the materials in the battery must also be from the continent. According to AP, the vast majority of EV purchases won’t qualify for the full $7,500 tax credit.

Granholm said at the event the grant should address that issue and “supercharge the private sector to ensure our clean energy future is American-made.″

Despite the aggressive push by the White House and automakers to transition the U.S. to battery-powered vehicles, convenience stores are not racing to install electric vehicle chargers at their locations, as demand charges and competition from utility companies make the investments unprofitable and unappealing.

Convenience retailers are hit with demand charges from electric companies because they are considered commercial users of electricity when a customer uses their EV charger to juice a battery. A demand charge is not just based on how much electricity convenience retailers use but the highest consumption they have over a short period of time.

Also, many electrical utilities have received approval to raise consumers’ electricity bills in order to pay for not only their own installation of chargers but also the operation of those chargers. Utility companies also may not have an incentive to reduce their demand charges if they are building their own EV chargers.

Additionally, the EV adoption rate by U.S. consumers is not as high as some predict. The Fuels Institute forecasts EV adoption nationally to reach almost 6% of vehicles in operation by 2030, and EV adoption rates will vary greatly by state, with 15 states hosting 76% of all EVs.

A recent NACS survey found that while higher prices have led consumers to reconsider everyday household purchases, higher gasoline prices haven’t translated into greater interest in electric vehicles. Of drivers who say they intend to buy or lease a new car within the next two years, only one in three (36%) would consider purchasing an EV, with convenience a concern.

Some automakers are not placing all their investment into electric vehicles and are betting that car buyers aren’t ready to rely solely on electricity to get their motors going. Toyota, Sweden’s Volvo Car AB and Korea’s Hyundai Motor Co. are among other carmakers investing in hybrid car models, which are in hot demand by car shoppers.

Despite hurdles, many convenience stores are still investing in EV charging infrastructure, including 7-Eleven, Sheetz and Circle K, among many others.

The NACS EV Charging Calculator allows retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.